Of all the things to think about in running a dental practice, insurance probably does not feature too high up on the list of priorities for most dental practitioners. Beyond the policies that are compulsory such as your buildings and liability covers, there is all too often very little time or appetite to consider anything else. This is understandable, with staff and patients to deal with, a practice to run and not forgetting CQC to consider, time is in short supply.
Insurance is that sort of topic – apart from to people like me, it’s not particularly interesting and easy to push aside to contemplate another day. It only gets really interesting when something happens and you need the benefit from it! Which is exactly why dentists should give insurance due consideration rather than leave themselves wishing they had at a later point.
Perhaps one of the most important areas a dentist, or any business owner, needs to consider is what would happen in the event of their inability to work due to illness or injury. The expenses of the practice would still continue, with staff costs, loan repayments, utility bills, rates, rent etc needing to be met.
There are a number of insurers offering Overheads Expense cover that will meet the ongoing costs of your practice whilst you are unable to work. The detail within the products vary in terms of the cover provided, underwriting requirements, cost, benefit period, duration of contract etc.
One of the biggest pitfalls is the nature of the contract – some are written on a long term basis, while others are reviewable after a set period of time. The long term contracts provide the terms of cover at outset, and they cannot generally be changed throughout the period for which you require cover (the insurance may however cease at a se age, normally 65 or 70). The big benefit of this is in the event of your health changing or you making a claim under your policy – this will not normally impact on your future cover. So, whilst this route can be more expensive the extra premium can prove well worthwhile in the long run. The renewable/reviewable type contracts generally offer cover on an annual basis. So, if your health changes or you make a claim during the period of the contract, or if the book of insurers business has a poor year in terms of the claims paid out, you could see your premium increase, terms imposed onto your ongoing cover or indeed future cover declined.
To apply an example to this, if you had a claim for a back problem, at your next renewal date you may well see an increase in your premium or a future exclusion applied in respect of back conditions. In then shopping around for an alternative insurance product, other insurers will simply exclude back conditions, either specifically or under a pre-existing condition clause. Had you been under a guaranteed contract in the first instance, your insurance cover will continue until the expiry age of the contract – meaning you could potentially have a series of claims for the same condition without being unduly penalised by your insurers. This can, and does, happen so you need to take a long term view on the insurance you choose.
You also need to carefully consider the level of cover you require. Insurers will generally pay a maximum benefit e.g. up to 80% of your actual overheads, so it is firstly important that you are not over insured – paying insurance premiums is bad at the best of times, you don’t want to be paying premiums for something you have no chance of receiving. Being under insured is not ideal either, although it is fine if you have taken a deliberate approach to taking out cover as a contribution towards ongoing expenses. The ideal scenario is of course to match your insurance cover with your exact requirements. Whichever approach you take, overheads insurance is critical and should be regularly reviewed so that you know what will happen, how much you will receive and how this integrates into and provides a solution towards your Disaster Recovery plan.
On a similar note, you need to be aware of the terms of your cover. Be sure you understand in what circumstances benefit becomes payable, for how long and an idea of the claims process. Basically, know what you have, who you need to contact and what you need to do in the event of a claim.
In protecting your business and taking out suitable Overheads Expense Insurance (and yes you really ought to do so if you have not already!), please bear the above comments in mind. Practical experience tells me you should!