Professional Overhead Expense vs. Business Interruption Coverage: What’s the Difference?

Veterinary practice owners have a lot on their plate. If you own a practice, you can attest to this fact. In addition to providing medical care to patients, you have to manage the budget, keep your employees happy, and market your services, among other things.

But perhaps one of your most important roles as a practice owner is helping ensure you, your employees, and your practice are protected if something goes wrong.

That’s where Professional Overhead Expense (POE) Insurance—also known as business overhead coverage—and Business Interruption coverage come into play.

If you get these two coverages confused, you’re not alone (and we get it—you have a lot going on as it is!). The good news? It’s never too late to gain clarity on something that can make a huge difference in the stability of your practice.

So… what’s the difference between these two critical coverages, and why are they so important? Read on to find out.

Professional Overhead Expense (POE) Insurance Definition

POE Insurance helps cover your share of operational expenses if you’re physically unable to run your business due to a covered disability.

So, let’s say a tumble down the stairs results in injuries that keep you from practicing for the considerable future. POE can pay a monthly benefit to help cover things like rent, utilities, and employees’ salaries.

Other eligible expenses include:

• Outstanding business debts
• Postage and stationery
• Equipment maintenance
• The monthly average of taxes on the premises
• Relief veterinarians’ wages

POE coverage helps ensure your business stays afloat, even if you can’t physically be there to support it.

Business Interruption and Extra Expense Insurance Definition

Business Interruption coverage responds in the event an adverse incident (e.g. fire or natural disaster) causes your practice’s business operations to slow down or come to a halt entirely.

Unlike property insurance, which replaces or repairs damaged structures and building contents, business interruption coverage protects your profits and offers financial reimbursement and assistance while your practice works to resume operations.

The Extra Expense portion of this coverage includes any extra expense the practice incurs in order to continue operating. Examples include renting at a temporary location, incurring additional utility bills, and more.

Business Interruption Coverage Real-Life Scenario

Still not sure if you need business interruption insurance? Consider this real-life example from an AVMA member insured.

A practice was severely damaged during the California wildfires. The practice owner was informed that while the building was salvageable, extensive repairs were required to return to an operational state.

The owner’s general liability policy covered the cost of repairs to the building and its contents, but its business interruption coverage protected the owner and her employees’ financial security during the four-month long rebuild.

Thanks to business interruption and extra expense coverage, the practice owner was able to continue operations out of a rental facility. Without this coverage, the practice may not have been able to financially survive the wildfires—despite having property and liability coverage in place.

AVMA Insurance Services Can Help Protect Your Practice

As an AVMA member, you have access to member-exclusive insurance through AVMA Insurance Services.

Professional Overhead Expense (POE) Insurance offers monthly benefits of up to $45,000 to help protect your practice if a covered injury or illness keeps you from working.

Business Interruption coverage is also available as part of our Veterinary Business Owner’s Package policy to help protect your business profits if physical damage to your property causes a slowdown or suspension of your practice.

Take a look at POE Insurance and Business Interruption coverage today to see how it can help protect your practice.

Professional Overhead Expense Insurance is underwritten by New York Life Insurance Company (NY, NY 10010) and issued to the AVMA LIFE Trust on group policy form GMR-FACE/G-14884-0. For more details, including features, costs, eligibility, renewability, limitations, and exclusions, visit the product page.

The experiences of the individual described herein may not be representative of the experiences of all clients.

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