Consider these scenarios: a fire destroys your business property; a broken water pipe causes extensive water damage to your office; a thief vandalizes your practice and steals your computer and equipment.
While property insurance covers the cost of replacing your building, equipment or materials in these unforeseen circumstances, how do you maintain your practice in the meantime? Business Interruption Insurance helps you get your office up and running again, in the shortest time possible.
Business Interruption Insurance supports you when your practice cannot operate as a result of a covered loss. It pays your fixed expenses — utilities, taxes and even employee wages — and includes Business Income Insurance to cover your loss of earnings. Coverage begins at the time of the loss and continues until you are able to reopen your practice.
Business Interruption Insurance may be automatically included in some business policies. However, business owners should still thoroughly review their coverage options to make sure they have coverage that suits their operation.
Two common forms of Business Interruption Insurance exist. The first, based on the operation's ability to create "earnings," covers a business from the time of the loss until it reopens. The trouble with this form for many businesses is that Business Interruption Insurance payments stop the minute the business reopens. For many, there is an ongoing financial loss even after you are able to reopen your practice. For example, your initial earnings may not be enough to cover expenses such as taxes and loans.
The second form, based on the operation's ability to generate a profit, is designed to cover a business until it returns to its previous level of profitability. Typically, terms are 12 months but can be extended to 24 months. The good news is that your OMA Office/Clinic plan provides this form of coverage automatically for a term of 24 months, and there is no limit cap. Your policy will respond to provide coverage for the Actual Loss Sustained, regardless of the amount of the claim.
Additional coverage options can include extra expense and professional fees. Extra expense coverage helps you pay for the extra costs of getting operational again, such as employee overtime or relocation to a temporary site (telephone, advertising, rentals). Professional fees coverage encompasses expenses and fees incurred in the assessment of your business interruption loss, such as counseling or legal fees.
With the OMA Office/Clinic plan, designed specifically for physicians, coverage includes extra expense, payroll coverage for 90 days, loss of rental income if you are the owner of the building, expediting expense, and Outbreak Extra Expense of $500 for 20 days.
As with all things insurance-related, the amount of coverage required can vary dramatically from one business to another. The coverage you need will depend on the type and size of practice you operate.
Business Interruption Insurance replaces business income lost as a result of an event that interrupts the operations of the business, such as fire or a natural disaster. It does not cover interruption to your practice because you suffer a disability through accident or sickness. For the latter, you will need Professional Overhead Expense Insurance.
OMA Professional Overhead Expense (POE) Insurance is a cost-effective way to keep your practice operating smoothly while you recover from a disability. While Disability Income Insurance will help you pay your personal living expenses in the event of disability, POE Insurance is designed to reimburse your professional expenses, such as employment salaries, rent, mortgage interest, professional dues, utilities or depreciation of office equipment.
Your OMA Office/Clinic Insurance provides you with the Business Interruption coverage you need to get your business up and running after a property loss, while OMA Professional Overhead Expense covers your continuing business expenses if you become disabled and cannot practice. It is not a question of one or the other: together, these two policies complement each other and provide comprehensive protection for your practice.
OMA Insurance Services has continued to negotiate with its insurance providers to design exclusive insurance programs customized to meet the needs of its members at the lowest possible price.
For information about Business Interruption Insurance, and to obtain a quote, call the dedicated OMA line at HUB International at 1.855.662.0500 or visit www.omainsurance.com. HUB International is the only OMA-endorsed provider for Office/Clinic Insurance.