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Whether you’re starting a solo practice or are sharing space with other dentists, you have a lot invested in your practice. A dentist’s office is a business, and in many ways it needs to be protected like any other business. Additionally, there is some business insurance coverage specific to medical and dental practices that needs to be in place, as well.
Business insurance can be confusing as well as expensive, so it’s important to make sure what you’re paying for is exactly what you need. What kind of coverage is required? What’s optional, and of those options what should you consider adding to your coverage package?
From the basics of property insurance to the many liability options available, take a look at what kind of business insurance dentists really need, what it covers, and tips for how to buy business insurance for your dental practice.
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The Basics: A Business Owners Policy (BOP)
A business owners insurance policy is a package policy that provides all of the standard coverage any business needs to operate. These policies can be adjusted and customized to suit your needs, but generally include a few basics. Here’s a quick breakdown of the three most common coverages included in a BOP.
1. Business Property Coverage
Much like the contents coverage on your homeowner’s insurance, this covers everything inside your office. For example, it covers everything from the computers at the front desk to the dental equipment you use every day. Whether a fire damages it or someone steals it, it covers all of the property on the premises.
2. General Liability
Again, this is comparable to the personal liability coverage your home insurance provides. It protects you from any event involving negligence or that causes injury or damage.
3. Business Interruption
A BOP also covers business interruption. This helps to keep you afloat if you’re unable to operate for a covered list of reasons. If, for example, there’s a fire in your office and you can’t see patients until the damage is repaired, this coverage would help pay for the lost income.
To tailor the BOP to the needs of a dental practice, other coverage can also be bundled into the policy.
Data Breach Coverage
Add this to your business insurance to cover costs associated with a data breach impacting your dental practice. This is a smart choice, especially given the private patient information stored in your electronic files.
Employment Practices Liability
This protects you from lawsuits related to employees, including wrongful termination suits and workplace harassment suits. We recommended that anyone with employees carry this coverage.
Dental Malpractice and Professional Liability Coverage
For any medical professional, malpractice is a frightening but all-too-real risk. Fortunately, malpractice lawsuits against dentists are less common than in other medical fields. However, they do still happen and can be very expensive to defend.
The general term professional liability refers to a policy that provides legal assistance and settlement payment to any professional when they are sued for actions taken in the course of doing their job that result in damages. Simply put, it’s there to protect you if you make a mistake (or to defend you from the accusation that you made a mistake, even if you didn’t).
For dentists, like all doctors, that coverage is generally referred to as malpractice insurance. It’s absolutely vital that you carry a solid malpractice policy. Although the odds are good that a dental malpractice suit will be dismissed or dropped, the cost of even preparing to defend yourself in court can be very high.
In addition to personal malpractice insurance, a dental practice should also have entity malpractice insurance. Where the former protects you personally, the latter protects your entire practice if, as an entity, it is named in a lawsuit.
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Other Business Insurance Coverage Dentists May Need
To round out your business insurance coverage, you should look at a few more pieces of the puzzle. Some are optional, and others you’ll need by law.
Employment practices liability was mentioned above, but if you do have employees you will also need to have a worker’s compensation policy. This provides for employees injured on the job and the law in most states requires it.
Business Overhead Expense Disability
This provides coverage for operating costs of your practice if you become disabled. Even if you have personal disability insurance, your business could suffer in the event of even a short-term disability. This coverage keeps things running so you can focus on recovery.
Key Person Life Insurance
Whether it’s you or someone else that is vital to keeping your practice running, the sudden death of a key person in the business can hurt everyone in more ways than one. A life insurance policy that protects the business from the loss of a key person can protect your legacy.
Commercial Auto Insurance
Auto insurance for dentists can generally be a basic personal insurance policy. However, if you have any vehicles that are registered in the name of your business, or that are used for business purposes, you will want to consider commercial auto insurance.
Do you really need all of this coverage? That will depend on the particulars of your situation. While a good rule of thumb is to remember that if you can’t afford the insurance, you probably can’t afford not to have it, balance is important. You don’t want to pay for what you’re unlikely to need.
Balancing Cost and Coverage for Dental Practice Business Insurance
Unlike your personal insurance, there aren’t a lot of discounts on business insurance out there. That doesn’t mean there aren’t ways to get the coverage you need at a better price.
The first step is to shop around. Insurance rates can vary wildly from one company to another. There are a lot of companies offering business insurance, so it’s best to get multiple quotes before you make a decision.
Insurance companies offer lower rates to lower risks. That means that making sure your practice is as low-risk as possible can reduce your insurance costs. While you can’t change some of the risks that are inherent in a dental practice, you can look at things like the location of your practice and the team and patient safety features in place.
Having solid safety practices in the office is also important to keeping your insurance costs down. Claims can very quickly increase your rates, so pay attention to maintenance and operating procedures to avoid facing a claim. Having the right insurance is important, but as with all insurance, the hope is that you won’t need it.
Take the time to analyze your risks and compare quotes for the coverage you’re sure you need along with whatever options you are considering adding on. Having all the numbers in front of you will help you to make sure you find coverage that fits your budget.
Leslie Kasperowicz is the managing editor of ExpertInsuranceReviews.com. She is a former Farmers Insurance and Financial Services CSR who has been helping people protect their investments and strengthen their financial stability for over 10 years.
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