A guide to business protection for dentists

Protecting your practice

Unexpected issues can arise at any time, which is why it pays to make sure you have the right level of cover in place for your practice.

Whether it’s equipment breakdown, contractual disputes or damage to your premises, dental practice insurance can help protect your business against these risks.

A good insurance provider will be able to offer the bespoke cover you need for your surgery, while making sure you don’t end up under-insured or paying for protection you don’t need.

It’s also important to make sure your policy is updated in line with any changes that happen to your practice throughout the year. For example, when you buy new equipment or update your security system.

Many practice owners only review their contents when they come to renew their policy, but if you need to claim before then, your new purchases or building changes may not be covered.

Protecting your partnership

While none of us like to think the worst will happen, the critical illness or death of a practice partner would have a huge impact on your business.

If one of your partners passes away, it’s likely that their estate will be left to their family – including their share of the dental practice. It’s also likely that their family won’t have any experience of running a dental practice.

In these cases, family members will usually want to withdraw their share of the value from the practice. Without the right level of cover in place, you and your remaining partners may not have the financial resources to buy them out.

This is where partnership protection insurance can help. Paid to you as a lump-sum benefit, this type of cover will allow you to buy your partner’s share of the practice if they’re no longer around – while also providing the right level of compensation for their family.

When it comes to arranging partnership protection, there are a couple of options to consider:

• The first is own life cover, which is suitable for a practice with more than two partners. With own life cover, each partner takes out their own policy and pays their own premiums – the benefits of which are written in trust for the other partners. The lump sum payout can then be used to buy out the deceased partners’ share of the business.
• The second option is life of another cover, which is suitable for a practice with only two partners. In this case, each partner takes out a life of another policy on the other partner. This means that the surviving partner will have the financial means to purchase the remaining share of the business.

If you’re unsure which is the right option for you, speak to a Specialist Financial Adviser from Wesleyan Financial Services to discuss your circumstances in more detail.

Protecting yourself against the loss of key employees

If your dental practice relies on one or two individuals to bring in business, it’s worth thinking about what would happen if they died or suffered a critical illness.

Typically paid out as a lump-sum amount, key person insurance can protect your business against the financial impact of the loss of a key employee, while also providing the support needed to hire or train replacement members of staff.

So, how do you identify a key employee? Put simply, a key employee is anyone who is crucial to the financial success of your practice.

This is usually a dentist with a specialist skillset (for example, dental implants or cosmetic procedures), but it could also be someone who is essential to the day-to-day running of your business. For example, a practice manager responsible for handling important business contracts.

There’s no set rule for working out how much key employee insurance you need, but it will typically depend on the size of your practice, how niche the expertise of the employee is, and the amount of income for which they are responsible.

Protecting your pockets and reputation

As a practice owner, there may come a time in your career where you face claims of negligence or malpractice. In these cases, many dentists turn to medical defence organisations (MDOs) to purchase cover.

While this is an understandable move, most MDOs will only provide cover on a discretionary basis. In the event of a malpractice claim they may choose not to get involved – meaning you’ll have to settle the claim from your own pocket.

This is where dental indemnity insurance can help. The types of cover you require will depend on your individual practice needs – but there are some key things to consider.

For example, a policy that provides vicarious liability will allow you to extend your cover to clinical and non-clinical employees of the practice, such as hygienists, dental nurses, practice managers and office staff. This means you’ll be protected against any employee errors or accidents that can put your business at risk.

You may also want to think about cover for regulatory defence fees (for example, GDC complaints and hearings, criminal proceedings and PACE interviews), court attendance costs and any unexpected cyber events – for example, security and data breaches.

Protecting your income

Illness and injury can happen at any time, and when it does, it can have a real impact on your professional life and finances.

If you’re unable to work through ill-health, hiring someone to fill your position can put a huge dent in your pockets – especially if you need cover on a long-term basis.

While an income protection policy is a good way to make sure you have the funds to cover your regular outgoings, it may not be sufficient enough to cover the cost of hiring a locum.

With locum insurance for dentists, you’ll be paid a regular income that can be used to ensure your practice continues running smoothly in your absence.

This income can typically be used in two ways. The first is to pay someone to carry out your normal duties if you’re unable to work, and the second is to cover ongoing practice expenses that you’re usually responsible for.

For example, if you’re suffering a long-term injury and aren’t bringing in a regular income as a result, you could use your cover to pay for your employees’ salaries. If you have to close your practice completely due to staff illness, you could also use your cover to pay for your rent and bills.

Whatever the circumstances, this type of insurance can provide the financial support you need until you’re back on your feet.