Most new dentists start learning about key types of practice insurance when already on-the-job. Almost all of those buying a dental business in Atlanta, GA know they need a malpractice policy. But beyond this professional liability coverage, few know which other insurances to include in their portfolio.
Your professional liability insurance company likely offers other types of policies that guard against unexpected problems. Overall, these mandatory and optional insurances protect you from personal and professional financial hardship. New dentists must consider these options and understand how to acquire them. After all, you cannot get coverage when you already need it.
Three Insurances You Need When Buying a Dental Business
Buying a dental business in Atlanta is an exciting time. But with this time comes great financial risk. Taking responsibility for your risk means building a portfolio of insurance packages designed to help you weather personal and professional storms. The three primary policies you undoubtedly need before starting business include malpractice, disability and life insurance.
Malpractice Insurance
Malpractice insurance obviously protects you and your patients, in the event of a claim. First-year dentists can obtain coverage for claims of $1 million to $3 million at a discounted rate. A tail policy on a standard malpractice policy covers claims made after your retirement, for earlier incidents.
Occurrence malpractice insurance covers claims made anytime during active practice and after retirement. Some policies allow you to add coverage for issues like wrongful employee termination and sexual harassment claims. Although these add to your premiums, benefits far outweigh the annual cost.
Your state dental association is a good resource for referral to professional liability insurance companies. When buying a dental business, you can also ask the selling dentist for a referral.
Disability Insurance
You should have disability insurance coverage in dental school and before you practice. Many students obtain their policy through the American Student Dental Association (ASDA). With an ASDA also comes free term life and accidental death benefits.
Many advisors suggest you obtain as much disability and term life insurance coverage as you can afford when buying a dental office. Most policies do not take effect for 30 to 180 days. Ensure your policy recognizes your “own occupation,” meaning you still receive benefits if disability prevents you from practicing dentistry, but leaves you able to do another field of work.
New dentists aged 26 to 28 and buying a dental business can usually expect benefits of about $5,000 per month. But your policy will also likely include a residual plan option and future increase option, so you can advance to $10,000 to $15,000 in monthly benefits. It is advisable to consider buying more than one policy from multiple insurance companies, to compound your benefits.
Life Insurance
Term life insurance is the most affordable option for a new dentist buying a dental business in Atlanta. Annual rates are not expensive when purchased through the ADA, but you must undergo a medical exam. Buy your policy before leaving dental school, for a substantial discount.
Other Insurance Coverage
Besides the three insurances above, you need other policies in place before starting to see patients in your new practice. These include:
- Workers’ compensation
- Facility insurance
- Office overhead insurance
All 50 states require workers’ compensation insurance. This protects your employees through lost wages compensation if they suffer harm or injury at work. Your payroll amount determines the cost of this policy, at about 40 cents per $100 of payroll each year. Your state dental society provides referrals to endorsed carriers, usually underwritten by private companies.
Facility insurance covers equipment and supply damages or losses due to fire, flood or other property destruction. Many professional liability companies also offer this type of coverage, as do private insurance companies.
Office overhead insurance covers the monthly costs of your mortgage, equipment loans, supplies and other expenses if you suffer debilitating injury or illness. These policies cost less than your disability income insurance, in most cases. They also satisfy many lenders’ disability loan collateral requirements. It is very important to consider this type of insurance, as most dentists experience one or more incidences of illness or injury during the lifetime of their practice.
A Good Transition Team Guides You through Insurance Needs When Your Are Buying A Dental Business
When you are buying a dental business, ensure you have a good team of dental practice consultants on your side. These consultants understand the business of dentistry and which insurance policies you need. Ultimately, you want protection from unforeseen damage, claims, injuries, accidents and illnesses.
Encompass IHC dental practice transition consultants guide you and help you understand what to expect when buying a dental practice. Our team includes practicing dentists who speak your language and have gone through these transitions, themselves. To find a dental practice available in Atlanta or elsewhere in the United States, call Encompass IHC today at 919-395-0444.
