A business owner policy, frequently abbreviated to “BOP,” is an insurance policy that typically covers you for events ranging from fire, to theft, or a general liability claim against your office.
Many insurance companies offer standardized policies that cover the needs of average businesses. As a dental practitioner, you are not running an “average business.” So-called “stretch endorsements” allow you to enhance certain items in the base policy to higher limits and better define them to the unique operation of your dental practice.
Here are some commonly overlooked items in standard BOP policies…
EPLI coverage is too low.
EPLI, or employment practices liability insurance, covers things like wrongful termination, discrimination and sexual harassment. Lower level employees in dental practices tend to be quite transient, in our experience, and for that reason you will want to make sure you have increased limits in your base policy or even a separate EPLI policy. With so many people coming and going, chances of a lawsuit are greatly increased.
Data breach is a reality even in smaller offices.
Many base BOPs don’t have coverage for data breach. As dental practices automate, use online billing, scheduling and charting, the probability of data breach increases. We advise our clients to obtain coverage as high as they can, based on the size of their practice.
Increase your limits for accounts receivable.
Insurance companies require you to have sufficient records to adequately document your accounts receivables if you need to produce them as a result of a claim – in the event of a fire, say, or data loss. Base coverage in a BOP policy is usually not sufficient and needs to be reviewed and tied to your average accounts receivable balance.
Have sufficient limits for non-owned autos.
Let’s say one of your employees gets into a car accident while taking care of a work-related activity using her car. You might be liable! Make sure your BOP has coverage for incidents that involve non-owned automobiles.
Where is your insurable interest?
In the world of property and casualty insurance, it is really important to be crystal clear as to whom or what the insurer is actually protecting at the time of the claim (not when you take out the policy). Many practitioners own the building that houses their practice. If you don’t properly document the lease agreement between the property and practice, and make sure it matches coverage limits for each responsible party (property owner vs tenant), you might run into problems when it’s time to file a claim. Even with practices that do not own the physical office, it is important to ensure the BOP policy matches the tenants’ responsibilities under their lease.
Don’t let the weaknesses of a standard BOP become weaknesses within your business. Work with an insurance specialist who understands the risk management needs of dental professionals, and can put into place the necessary modifications to make your policy strong.
~Kenneth C. Thomalla, CPA, CLU, CFP®, Chief Operating Officer, Treloar and Heisel, Inc.
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About Treloar Heisel
Treloar & Heisel is a premier financial services provider to dental and medical professionals across the country. We assist thousands of clients from residency to practice and through retirement with a comprehensive suite of financial services, custom-tailored advice, and a strong national network focused on delivering a higher level of service. Visit us at Treloaronline.com