Whether you’re starting a new practice or have been an owner for a long time, having the right insurance is crucial to protect you from financial distress. Dental practice insurance is essential for every practice owner, but how do you ensure you get the right coverage?
This article will discuss the types of insurance your dental practice needs to minimize financial risk and give you peace of mind.
Business Owners Policy (BOP)
The first insurance every practice owner should consider is Business Owners Policy (BOP). It’s a bundle of insurance options that packages important coverages into a single policy, allowing you to save money and obtain protection from property and liability risks. You can customize a BOP policy according to your practice’s needs, but the most common inclusions are:
- Property insurance – If your dental practice suffers from a natural disaster, fire, or theft, property insurance can help cover the repairs/replacement of structures and dental equipment. It’s a good idea to estimate your property’s costs to provide to your insurer in case the unthinkable happens.
- Business interruption insurance – When your practice’s operations get disrupted, your ability to generate revenue decreases significantly. To prepare for such situations, you need business interruption insurance. This type of insurance covers lost income, expenses, and even debt.
- General liability insurance – General liability insurance protects you from claims against your practice. For example, if a patient slips and gets injured while inside your practice, general liability insurance can help pay for the medical bills you’re legally liable to cover.
- Employment practices liability insurance – There are instances where an employee can accuse a practice owner of workplace discrimination, legal rights violation, and more. With employee practices liability insurance, the policy covers settlement expenses and defending a lawsuit in court.
Dental Malpractice Insurance
Unfortunately, even the most experienced dentists can make mistakes, so dental malpractice insurance is essential to protect you from claim allegations. Some states also require this type of insurance to keep your license active.
Insurance companies usually offer dental malpractice insurance on a claims-made policy. For example, if you accidentally damage a patient’s nerve, they can file a malpractice lawsuit and hold you legally accountable. If this happens, and you have the right coverage, dental practice insurance will shoulder the attorney costs and any legal expenses. You can also avail yourself of entity coverage that protects you from malpractice claims against your dental practice.
Cyber liability insurance
Dental practices are no strangers to cyber attacks, as they hold valuable information from patients that hackers like to target. Data breaches can devastate practices of all sizes, which is why you need cyber liability insurance.
As a practice owner, it’s your responsibility to protect the information clients share with you. The last thing you want is to face a patient lawsuit due to a data breach, and you don’t have the appropriate coverage for it. Investing in cyber liability insurance will offer the following:
- Cover legal expenses caused by the data breach.
- Pay damage awards from claims.
- Provide credit monitoring to your patients.
- Cover damages from ransomware (in some cases)
Equipment breakdown coverage
Dental practice equipment is expensive, and attempting to repair/replace them out of your pocket is often unfeasible. From 3D printers to X-rays and vacuum systems, equipment breakdown coverage protects you from equipment damage resulting from mechanical breakdowns, electrical shorts, operator error, and power surges.
Note that equipment breakdown coverage doesn’t offer protection from damaged equipment resulting from natural disasters, which is why a BOP policy is a must for every practice.
Workers compensation insurance
Workers’ compensation insurance is compulsory for every business in the U.S. and protects your practice and its employees from unforeseen medical costs. The insurance also compensates your staff’s income when they cannot work.
Employers are legally obligated to look after their staff members. As a practice owner, workers’ compensation insurance ensures your team gets the medical care they need without paying out of pocket. It also protects you from lawsuits if your staff gets injured while working.
Business overhead expense disability insurance
Accidents can happen, and if you end up temporarily disabled, you need business overhead expense disability insurance (BOE) to cover the costs of running your practice. BOE ensures your practice doesn’t fall apart while you’re recovering from your disability. Some of the expenses covered by BOE insurance include:
- Employee wages
However, BOE doesn’t cover your lost wages resulting from your disability. For that, you’ll need individual disability insurance to cover your salary. Insurance companies have different requirements for BOE, but typically they’ll require you to verify your practice’s minimum revenue and be in business for at least two years.
How do I choose the right policy for my dental practice?
Around 75% of businesses in the U.S. are underinsured by 40% or more. That’s why choosing the right policy is essential to ensure your dental practice has adequate coverage. To help you make an informed choice, it’s worth considering the following:
- Deductibles – Deductibles refer to the money you pay towards an insured loss. For example, if the insurer values your loss at $10,000 and the deductible on your policy is $1,000, you’ll receive a check worth $9,000. In general, larger deductibles mean lower premiums for an insurance policy. Of course, you’ll need to consider your capability to pay out-of-pocket before the insurance starts paying.
- Amount of coverage – It’s always a good idea to acquire the most coverage you can for your practice. It can be tempting to skimp on insurance coverage if you’re a new owner, but the risk of financial uncertainty increases, exposing your business to all sorts of accidental loss. We recommend talking to an experienced agent about your coverage needs to acquire the right coverage that fits your budget.
- Insurance rates – Many factors, like industry risks, practice size, location, and the assets you want to insure, affect your insurance rates. While some factors are out of the owner’s control, there are ways to lower your premiums. For example, you can create a safer working environment by substituting tiled floors with vinyl planks. You can also install fire alarms and security systems to lower commercial property insurance costs.
- Policy details – Policies differ between carriers regarding exclusions, limits, deductibles, etc. That’s why it’s a good idea to read your insurance policy before buying it to ensure your needs are fully covered.
It’s understandable for practice owners not to want to read their policies due to the nature of running a business. But, doing so can eventually backfire on you, especially when the time comes you file a claim. So, take the time to read your policy details to confirm you have no gaps in coverage.
Obtaining the right insurance for your dental process can be quite complex, but taking the time to do so is more than worth it. While every practice’s insurance needs are different, these types of coverages are a good baseline for you to start. It’s always a good idea to talk with a reputable insurance agent to avail of the recommended insurance products for your practice.
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