Who pays the wages, rent and other bills if the doctor gets sick?

June 2019

As most practices are reliant on a small number of practitioners to generate income, it’s worth asking the question: “If one or more of the main income producing practitioners is unable to work due to illness or injury for an extended period of time, how do we cover the fixed costs of the business?”

At first glance, you may think that if you and your colleagues have income protection insurance everything will be fine. Income protection typically covers around 75% of the individuals’ pre-disability income. While this money can help to cover everyday costs and household bills – would it stretch to cover business expenses like rent, salaries and leasing costs?

As alarming as it may sound, over 60% of Australians will be disabled for more than one month in their working life. Further, over 25% will be disabled for more than three months.

As a practice owner, it’s worth taking stock of what is being spent on the following:

  • Staff salaries
  • Leasing costs
  • Accounting
  • Advertising
  • Audit fees
  • Cleaning

These are just some of the fixed costs that could be covered by the right business expense insurance policy.

Peter’s story

Peter is an Opthalmologist in partnership with another practitioner. They employ a practice manager and reception staff in rooms they rent close to a major private hospital. Unfortunately, Peter has a serious accident on a family skiing holiday which leaves him with a broken arm and some broken fingers, as well as significant back injuries. Peter requires long-term rehabilitation before he can return to work – it could be as long as six months.

Thankfully, Peter has business expense insurance – so he can continue to pay his share of the employee costs and fixed expenses, and the cost of a locum is covered so he doesn’t lose patients.

If a doctor in your practice couldn’t work, how would you keep up with the costs?

Business expense insurance provides a monthly benefit that can help to ensure fixed operating expenses are covered so they can focus on returning to peak health ...  and to work.

Where can I find out more?

We can explain more about the different types of insurance, and help you tailor the right cover for your practice’s needs.

If you would like to find out more about business protection insurance, please do not hesitate to contact one of our trusted advisors.

Get in touch

Topics: medical accounting, doctor, insurance, Risk insurance, Cutcher & Neale Risk Insurance, medicalpractice

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