Doctors, lawyers and business owners often have leases, payroll and equipment expenses, and other substantial business-related expenses that require ongoing payment in the event of disability.  It is not uncommon, when purchasing disability income insurance, to also purchase a separate policy of disability insurance covering the cost of these expenses.

Office overhead policies always specify the expenses that are covered and subject to reimbursement.  Most policies cover things like rent, telephone/utilities, employee wages, business and liability insurance, professional dues and memberships, leased equipment, and the like.  Normally, they don’t cover the insured’s own salary, travel and entertainment, or expenses for which the insured was not liable prior to the onset of disability. 

Typically, the policy specifies a waiting period and a maximum period of time (normally 1-2 years) during which covered expenses will be reimbursed.  The policy may also specify a monthly and/or aggregate cap on the amount of reimbursement that will be paid.  To receive payment, the insured must provide the carrier with monthly reports of covered expenses documented by paid receipts and other records. 

Some policies provide for reimbursement in the case of partial disability, and some only pay in the event of total disability.  The definition of what constitutes partial or total disability varies from one policy to another and can be different than the definition contained in a disability income policy issued to the same person by the same carrier. 

From a claim management standpoint, the main difference between disability income insurance and office overhead insurance is the need to document expenses and the frequency with which it must be done.  This is a time consuming process that often requires the assistance of an attorney as well as an accountant.  One must be prepared to deal with this when filing a claim for office overhead coverage.