Insurance Needs for New Practice Owners
Opening a new practice? GDIS offers specialized business insurance solutions to help you get your practice from dream to reality.
Once you secure a bank loan, you should receive a list of insurance requirements needed prior to closing. All banks will require a general liability policy. In addition to a general liability policy, some banks may require you to have a workers’ compensation, overhead policy, and/or a life insurance policy. This list can easily grow and seem overwhelming, but these policies are necessary to protect your practice. Let’s dissect the different types of business policies and their importance so you know what questions to ask your insurance agent.
General liability protects you against third party claims for bodily injury and property damage (i.e. someone slipping and falling while at your facility). Professional liability covers negligence from services received from you and/or your staff (i.e. improper extraction of teeth). Having both a general liability policy and a malpractice insurance policy ensure you are covered in both circumstances.
Your practice facility and general liability: Do you plan to lease a facility or buy a building? If you plan to own the entire building, your bank will require your general liability policy to include general liability coverage, building coverage on the entire building and contents coverage to insure your equipment inside. If you plan to lease a space, you may be responsible for some of the structure of the building, along with general liability and contents coverage.
While on the subject of buildings, most people forget to check if they need flood insurance coverage. Standard building policies only cover flooding if there is a backup of the sewer and drain or if rainwater comes through the windows or roof of your building and damages your contents. If your building damage is due to rising water, it would not be covered. This is why a flood insurance policy is so important even if you are not in a flood zone.
- Other Business Exposures: Now that you’ve met your bank requirements for your business insurance policy, you will need to consider other parts of your policy. Ask your insurance agent about business interruption, data breach, EPLI, and hired non-owned auto coverage. Business interruption covers loss of income due to a disaster. Data breach covers your business if there was unauthorized access to or disclosure of your business’ or client’s personal information. EPLI (Employment Practices Liability Insurance) covers instances of wrongful termination, discrimination, sexual harassment, and/or retaliation that occurs in your place of employment. If your employee took their car to run an errand for you while on the clock and is involved in an at-fault accident, the hired non-owned coverage on your policy would protect your business should your practice be named in a lawsuit. In the event a patient sues you for any reason, he/she will not only pursue you, but may name your practice in the suit as well. An entity policy would cover your practice in the event it was named in a patient lawsuit. Lastly, it is highly suggested that you get a commercial umbrella. If you were to exceed any of your liability limits, your umbrella would step in to cover the additional cost including court expenses, settlements, and judgements granted by the court.
You and your employees: Banks will require a workers’ compensation policy if there are three or more employees. If you plan to offer health insurance as an employee work perk, GDA offers affordable health plans to you and your dental practice staff. Even better, it can be of no cost to you and there are no minimum number of enrollees required. In the event that you are seriously injured and could not work for an extended period of time, having a disability policy will cover a certain amount of your income while you recuperate. Lastly, what will happen to your business in the event of your untimely passing? Life insurance can cover your business expenses and debts, provide a savings to your family as they adjust, and can offer a life insurance buyout option for those who have partners, sometimes referred to as entity-redemption plan. As a new practice owner, it is your obligation to talk with your insurance team to make sure you covered in the event you or your team are faced with any of these circumstances.
Once your business is protected, it is time to roll up your sleeves and get your practice open for business and patients in your office. Being a GDA member, you have access to several resources through our partnership program that will help you get your business off the ground: discounts on dental and office supplies, HIPPA compliant products, payment processing, and marketing resources that will attract patients to your business.
Please know that this is not an exhaustive list, but should serve as a starting point for the next chapter in your career. For a customize insurance plan, please contact your GDIS team today. 770-395-0224.