In my most recent blog post, I briefly discussed five insurance products that should be considered as an integral part of any natural disaster plan. Since that post was published, another natural disaster of overwhelming magnitude has occurred. The devastating fires in California have left a huge footprint of death and total destruction. It is painful to even try to imagine what it would be like to own a dental practice in that region. This unfortunate event reinforces once again the need to have adequate protection for your business.

Of course there has to be a balance between overhead management and risk management. These policies come with a substantial cost. In doing my research for these posts, I spoke to many insurance professionals and visited many websites. The more I delved into this topic, the more I realized its complexity. The state where you practice, the age of your office building, the type of construction, square footage, building and personal property values, and a host of other factors will influence the cost and the availability of coverage.

I came away with some absolutes. First, there is a significant dollar savings in purchasing combined coverages in packaged policies versus individual stand alone products. Second, working with insurance professionals who have specific expertise for dental practices is a must. I would feel comfortable recommending two excellent companies for your consideration.

Risk Strategies Company – Their health care practice is one of the largest in the country and gives you access to specialists with industry experience in large brokerages, consultancies, and insurance companies. They provide innovative and practical approaches to the full spectrum of liability and risk that your business faces. Contact: Diane Veltri at 401-272-1358.

Click Insurance –  This is a client focused agency that specializes in insurance education and advocacy. From their headquarters in Watertown, MA they use modern technology to bring the local agent feel to clients all over the country. Contact: Matt Stawarz at 781-819-0066.

After the horse has left the barn it is too late to lock the door. It is part of human nature to delay and procrastinate. I urge you immediately to take the steps to create and/or re-examine your insurance protection.

I sincerely hope that you personally were not adversely affected in the aftermath of hurricanes Harvey, Irma, and Marie. But if nothing else, by watching and reading about these weather events and the incredible devastation that they caused, I trust you have become super motivated to examine your own disaster coverage. Here is some information to help get you started.

1. Business Income or Business Interruption Insurance – This coverage provides cash relief as a result of any disaster that prevents your office from being open to see patients. After a minimum 24 hour waiting period, you will receive a daily dollar amount based on historical income and expense information that was provided at the time the policy was issued. The duration of the coverage is usually from one month to a maximum of six months. So based on the size of the practice, you could receive $1000, $5000, or $10,000/day – whatever is representative of past revenue. These plans always have a deductible, a specific dollar amount, and a fixed time period of coverage. The annual cost of the policy is priced accordingly.

2.Business Overhead Insurance – this is NOT natural disaster related, and should not be confused with such. This coverage provides income to cover fixed office overhead costs like staff, rent, loan payments, etc. in the event that the doctor is injured or sick and cannot practice. There are various waiting periods before coverage kicks in – and the policies are priced accordingly.

3. Business Personal Property Insurance – this coverage is for the costs to repair an office or office contents that are damaged by fire, wind, hurricane, and water damage from plumbing. Some policies have a small allowance for flood damage, but flood damage policies usually have to be purchased separately.

4. Flood Insurance – These policies are tricky. Flood as an insurance peril can complicate a business continuity plan. You have to be careful about the definition. We have all just witnessed the worst possible demonstration of why it is important to know and understand your flood risk and how your coverage operates following a disaster. Pricing is determined by where you live and how much you want in coverage.

5. “Civil Authority” Insurance – another kind of disaster coverage that is relatively new can be purchased as an adjunct to the business interruption insurance that I mentioned in item 1. This type of plan provides financial relief to you even if your physical space was not damaged but the surrounding community was. For example, in the recent Houston area incident,  even if you were fortunate that your physical dental office was not damaged, there was so much flooding and power loss around you that patients could not travel to your office.

6. Although it is not an insurance product per se, you would be totally unprepared and out of touch with reality if you are not currently backing up computer data to an off-site server or to the Cloud.

In my next post, I plan to offer some concrete recommendations on how to go about purchasing the proper disaster insurance coverage.