Business Owners & Workers Comp
Business Owners Policy (BOP):
How it Works
It is normally compromised of these two components:
1. Business property insurance: Required whether you own your own building or lease the practice. This is the first of the two core coverage in a BOP. Business Property Insurance is a commercial property insurance protects your building and its contents, as well as exterior fixtures, such as a fence or outdoor sign. This is normally the first requirement by a bank to protect all of the equipment financed for the practice to prevent any immediate or unnecessary loss.
2. Business Liability Insurance: Is purchased to protect the financial interests of practice and practice owners in the event that they face any formal lawsuits or any third-party claims. Such policies cover any direct financial liabilities incurred, as well as any legal defense expenses ( This is not malpractice insurance. Think more on the lines of someone slipping and falling in the practice and suing you for neglecting to maintain the property). Basically any lawsuit that does not involve the dental work you perform on patients. Many Americans are litigious especially when involved with a doctor because everyone thinks doctors have money. Always make sure to carry an adequate amount of liability as lawsuits can drain practice finances and create an unnecessary roadblock to growth and future success.
A BOP is almost always required by the bank to secure a loan to start up or acquire a dental practice.
There are many variations per state on what may be required just make sure this is handled by a financial professional who specializes in dental insurances as there are a number of dental specific features that should be included on these plans.
Other option features that may be added to a BOP include but are not limited to:
Employment Practices Liability Insurance: This is typically referred to as EPL insurance or EPLI. EPLI provides coverage to employers against any claims made by employees alleging: Discrimination (based on sex, race, age or disability, for example) Wrongful termination or Other employment-related issues, such as failure to promote. This is a very crucial insurance added on by most practices after 2-3 years of operation.
Data Breach Insurance :This is a broad policy covering any potential costs of a data security breach that could hit the Dental Practice. This coverage protects the insured if sensitive data is compromised.
Data Breach is very common on the West Coast as in the dental community it is heavily common to occur there. Most practices in general purchase this coverage once they have been in operation around 3 years time.
Once your BOP is setup most practices and even a handful of 1099 Dental Practitioners who do not even own a practice are required by the bank, state or their employer to carry Worker’s Compensation Insurance.
Worker’s Compensation: is a type of insurance that offers wage replacement and medical benefits to any employees injured in the course of employment at the practice in exchange for mandatory relinquishment of the employee’s right to sue his or her employer for the tort of negligence.
Almost always required this coverage is crucial in protecting the practice-owner of any additional lawsuits that may come of an injury at the workplace.
Protect Yourself & YOur Practice
As boring as these insurances may be, they are sometimes the only thing in the way of a practice undergoing a serious expense that could compromise the growth or even the future existence of the practice. As a practice owner always do your diligence and make sure the group assisting your need is not only working in a fiduciary standard of care but also that they specialize in knowing when a policy may need these features/plans and that they can provide a road-map on everything a Dentist/Dental Specialist may need as the practice grows and becomes more complex.