Bowman Insurance and Benefit Services
Insurance for Practice Owner
Malpractice

As the owner of a Dental Practice, you have many choices to make about your Malpractice insurance coverage. Initially you will have to decide on using Occurrence or Claims Made policies, your coverage limits, and whether or not to join State sponsored funds in some areas. You will then need to determine whether to have shared or separate limits for your corporation. Also, you may be asked to pay for the coverage of any employee or I/C dentists. In that case, you must set the parameters of the type of insurance coverage and the cost for their policies as well. Although office staff are covered under your Malpractice insurance policy, you may be asked to pay for separate coverage for your Hygienists or Dental Assistants. Finally, you will have the choice whether to “bundle” your policy with your General Liability, Office Contents, Building and Workers’ Compensation policy. These “bundled” Business Owners Policies will generally offer you large discounts for your insurance coverage. Whatever your situation, we can help direct you to the appropriate Malpractice coverage at the best possible price.

Disability

Your most important asset is not your home, your car, your jewelry or other possessions.  It’s your ability to earn a living.  We plan our lives based on the assumption that we will continue to earn a paycheck until we retire.  Disability insurance provides an income to you and your family if you are unable to work because of illness or injury.

The dentist business owner has several types of disability insurance to consider.  Personal coverage provides an income to you and your family if you are unable to work because of illness or injury.  It is especially critical for a dentist to consider disability insurance both because you have invested so much time and money to become a dentist and own your own practice and also because the fine motor skills you use in your profession make you more vulnerable to being unable to practice.

When buying personal disability insurance for the first time there is lot of terminology that needs to be considered.  Based on our vast experience working with dentists, we have put together a list of some of the “must haves” in a policy for a dentist.  We call these the Top 10 Things to Consider before you buy Disability Insurance”.  Most importantly, you want a policy that is a True Own Occupation policy with no Mental Nervous exclusions.

Dentist Business Owners often will need to provide collateral to a bank for the purchase of their practice.  In these cases it is important to consider either Business Reducing Term or Overhead Expense coverage that will cover your loan or fixed expenses without touching your personal disability income.

If you are in a partnership, you may need to consider a Disability Buyout policy for you and your partner.  This type of policy provides the money to buy out the other partner according to the terms of your Buy-Sell Agreement if one of you were to become injured or disabled.  This protects both you and the business.

Life

In the event of a tragedy, life insurance proceeds can help pay the bills, continue your business, finance future needs like your children’s education, protect your spouse’s retirement plans, and much more.  You should definitely consider life insurance if you are married, have a mortgage someone is responsible for, currently have any personal debt that someone else is named on, or if you have children.

There are many types of insurance but the two main categories are “term” insurance and “permanent” insurance.  Term insurance it great for large amounts of coverage and is inexpensive when you are young, but permanent insurance offers many tax advantages for retirement and estate planning for successful dentists.

As a dentist who owns a practice you may often need to provide an “assignment” of life insurance benefits to your financial institution to back up your loan.  Since the bank gets paid first-this will leave less for your family.

If you are in a partnership, you should always have a legal buy sell agreement prepared by an attorney.  Life insurance is often used to provide the funds to exercise your agreement in the event of a partner’s death.  This is why it is important to have life insurance policies on each other for this type of situation.  Let us sit down with you to determine what sort of coverage will meet your goals, your budget and protect your loved ones.

Health

As a practice owner, you must make the decision of whether or not to offer health insurance to your employees.  You can form a group health insurance plan with as little as two full-time employees, but you must offer the coverage to all of your employees working full-time.  You would also be required to pay at least 50% of the employee’s premium.  The employee may choose to include their spouse/children, but they would be responsible for the additional cost.  Sometimes, your staff will already have coverage through their spouses, so a group plan is not always an option.

Another option to consider would be applying for an individual/family plan.  There are fewer options for this type of plan, especially when it comes to maternity coverage.

As the business owner, it may also be important to consider tax savings.  You may want to consider whether or not to use a Health Savings Account (HSA) to maximize your business deductions.  As insurance, HSAs suit healthy individuals who need only minimal care from a doctor and don’t have expensive prescriptions.  As an employer, you can even give your employees the choice of high-deductible insurance or low-deductible insurance.

No matter what your situation is, give us a call to discuss what all of your different options are.  You may find that there are other solutions that could save you money on your health insurance.

Property, Contents & General Liability

The Dentist Business Owner is responsible for insurance coverage of all the contents and fixtures inside the drywall of the office.  They are also responsible for coverage for any General Liability issues inside the office and may be responsible for coverage outside the immediate outer premises of the office such as sidewalks and parking lots.  General Liability Insurance is typically known as the “slip, trip, and fall” insurance and will usually be required by the lending institutions, landlords, or mortgage holders the business owner works with.

In addition, as the business owner, you may also need to cover the building itself.  Coverage limits on these policies vary greatly.  Many dental offices are extremely underinsured for the replacement cost of their contents.  Ask yourself, “if my office is destroyed today, do I have enough coverage to replace all my equipment, fixtures, and supplies?”  Let us help you review your coverages and provide great discount pricing on “bundling” your Business Owners policy with your Malpractice coverage.

Workers Comp

Workers’ Compensation is required by law to provide coverage for on the job injuries for your employees.  It is one of the least understood insurance coverages for the Dental Business Owner.  As a result, some business owners forget to set up coverage for their employees until state officials walk in to do an on-site inspection and ask to see proof of coverage.  Fines for failing to show proper Workers’ Compensation coverage are quite large and accrue on a daily basis.  Business owners and partners in their legal corporation can be excluded from coverage.  We can help set up or review your Workers’ Compensation coverage and provide the best possible rates for this important coverage.

Investments

Saving for retirement is critical once you enter the work force.  However, with all the other expenses of being a business owner, setting aside money for this purpose often feels impossible.  Many dental business owners simply assume that they will sell their practice when they retire and use this as their retirement plan.  The problem with that is the economy may make your practice less valuable at the time you want to retire.

As an employer, you have options to start saving for retirement on your own.  The issue here is that there are limits and tax implications on the amount you can save on your own.  To increase your ability to save and help with tax situations, many employers will decide to offer a retirement plan through the office.  These plans offer many advantages but also some restrictions and they must be offered to your employees.  Once you decide to offer a plan, what plan should you offer?  Should you offer a SIMPLE IRA, a 401K plan, A SEP plan, or a Defined Benefit Plan?  What about a “Golden Handcuff” for a key employee?  What sort of contribution or matching limits is there for each plan?  If you do offer a retirement plan, how is it presented to your employees and who will manage the paperwork?  What sorts of fees are there to administer a plan?  Finally, what should you consider before you invest?  Let us help you come up with a plan to help you meet your retirement goals.  The “time value of money” principle shows that it is not how much you save each month, but rather that you start saving a little each month as soon as possible to accumulate money for retirement.  We can also help design a personalized plan that takes into consideration your saving goals, your risk tolerance, and the advantages of dollar cost averaging.

Employee Benefits

All Dentist business owners will find that offering employee benefits are critical for attracting and retaining good employees.  Trying to navigate through all the benefits available while balancing the cost of such benefits can be very difficult.  Once you decide to offer benefits, you will also face the challenge of managing these benefits.  You and your employees may want Retirement Plans, Group Health Insurance, Group Life Insurance, Group Long Term and Short Term Disability, Flexible Spending Accounts, and other benefits.  Some of these may be appropriate to implement in your office while others may not.  Some plans require large group participation numbers while others are not cost effective at times.  It is important to work with an agency that can help you determine the benefits that are appropriate for your dental office, while also providing the services to manage these benefits at an affordable cost.