What is insurance, really? And how should I manage my coverage?
For many dentists, insurance is an obligation, because doctors are required by law to carry malpractice coverage. Or they are required by a lender to carry business owner’s coverage to satisfy a loan agreement. For others, insurance is a frustration in their life because they are stymied by the policy language or they worry they may not understand how the policy can (or cannot) respond to potential risks.
In reality, insurance is a product. And that product is a cash reserve in case of an emergency. You accept a manageable expense now in order to avoid being overwhelmed by a catastrophic expense later.
As with any product you purchase (a cell phone, an automobile, etc.), insurance will best serve your needs if you:
- buy it intentionally,
- use it intentionally, and
- understand how it works
If insurance is a product, then the policy itself is the contract.
A contract is a written agreement between two parties. In the case of an insurance policy, that agreement is between the dentist (or dental practice owner) and the insurance company. The policy specifies the potential risks it can, and cannot, respond to. This is why you should be intentional when you purchase coverage.
For example, a Business Owner’s Policy (BOP) cannot cover a workspace that is vacant or under construction. It is specifically designed to cover the risks inherent to operating a functioning dental practice. For periods of construction, you would need different coverage: Builder’s Risk and General Liability Under Renovation. [For more information about this, see my teammate Nick Cepparulo’s article “The Building Blocks to Insuring Your Start-Up”.]
On the other hand, a BOP can
provide coverage for the risks that arise when an employee operates their own car in the service of your business, so long as your BOP includes Hired and Non-Owned Auto coverage.
A dental malpractice policy can cover you if you have an incident with a patient during treatment that turns into a claim or a lawsuit. But it cannot cover an incident where a patient slips on your carpet in the waiting room—for that you need the General Liability coverage found inside the Business Owner’s Policy (BOP).
Fine. How should I manage my insurance coverage?
As an Account Executive at CFS Dental Division, I want my clients to feel confident that they understand their coverage. It is easy for any dentist to treat insurance as an afterthought, given the demands of clinical work and the time and effort it takes to run a business. But, if a catastrophe does occur, your experience will be less stressful if you understand the basics in advance.
Here is what I recommend:
Step 1: Read your policy.
Your insurance policy will lay out precisely what it covers, and how it is designed to respond to risks. Although policies can be long and the language can be complex, you may find you understand more than you expect to. Reading the policy is also vital because it is a contract and, when you sign it, you agree to its provisions. And for items that need further clarification, you can always . . .
Step 2: Ask your agent questions.
Your agent’s job is to analyze your needs and find the best insurance product to address them. Before you purchase a new policy, provide as much specific information as possible to your agent. Then, ask your agent lots of questions about what they recommend and why. Your agent wants to do everything they can to ensure you do not experience gaps in coverage, but this takes a lot of examination and analysis because they are trying to project into the future to predict what disasters might befall your practice. By asking your agent questions, you will both build confidence that the insurance products are the correct ones.
Step 3: Send your agent updates when you make any change to your practice or your office, no matter how small they may seem.
When you choose an insurance policy and make that first payment you are accepting responsibility to manage your coverage going forward. As your practice grows and develops, your insurance needs will change, and your coverage must be updated to adapt accordingly. Adding or subtracting certain dental procedures will impact your malpractice coverage as well as your premium. As will making significant changes to your number of clinical hours per week or adding a new practice location. Purchasing a new piece of equipment or expanding your office space could leave you under-covered if you do not notify your agent. Even neglecting to advise your agent that your mailing address has changed could lead you to miss a premium payment and cause your policy to lapse. Your agent wants to hear from you. They want to help you maintain appropriate coverage.
This is the information I wish every one of my clients understood. Now that you know, make sure to share it with your colleagues. They will thank you, and so will their insurance agent!
Written by: Eric Harper
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Imagine this: You wake up tomorrow with an injury or illness that makes it impossible to work—not forever, just for a few months. At first, it doesn’t feel catastrophic. You assume you’ll recover, get back to work, and move on. But then reality starts to set in. Your paycheck stops. Your expenses don’t. The Financial Reality Most People Don’t Think About Even a short period without income can create real financial pressure. Think about your monthly expenses: Rent or mortgage Utilities Car payment Groceries Insurance Student loans Now imagine covering all of that… with no paycheck coming in. Most people have some savings—but for many, it’s not enough to comfortably cover 3–6 months of expenses , especially when unexpected medical costs may also be involved. And while friends or family may help, that’s not a long-term solution. “Wouldn’t My Job Cover Me?” This is one of the most common assumptions—and one of the biggest gaps. Some employers offer short-term disability coverage, but: It often replaces only a portion of your income (typically 40–60%) Benefits may be taxable Coverage usually ends after a few months After that, you may need long-term disability coverage—or you may be left without income entirely. Understanding the Difference: Short-Term vs. Long-Term Disability Here’s a simple way to think about it: Short-Term Disability (STD): Covers you for the first few months you’re unable to work (often 3–6 months) Long-Term Disability (LTD): Kicks in after that and can provide income for years —sometimes until retirement age Together, they’re designed to protect your income—not just for major, life-altering events, but for situations that are more common than people realize: Injuries Surgeries with recovery time Pregnancy complications Illnesses that require extended time off It’s Not Just About Worst-Case Scenarios When people think about insurance, they often think in extremes. But the reality is, a temporary inability to work is far more common than people expect—and it doesn’t take a worse-case scenario to create financial stress. Even a few months without income can: Drain savings Increase reliance on credit Delay financial goals Create unnecessary stress during an already difficult time A Simple Question to Ask Yourself If your income stopped tomorrow, even temporarily: How long could you comfortably maintain your current lifestyle? Not just get by—but maintain it . Your income is one of your most valuable assets. Protecting it isn’t just about planning for the worst—it’s about being prepared for the unexpected. Final Thoughts Most people insure their homes, cars, and even their phones—but overlook the one thing that makes all of those possible: their income. Taking a few minutes to understand your current coverage—whether through your employer or individually—can make a significant difference if life takes an unexpected turn. Written By: Reghan Handley
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Everything is done for you to buy that practice, you have been approved by the bank, the lease has been signed, and the bank is ready to disburse the loan so you can be a practice owner! There is just one issue, they need you to collaterally assign them a life insurance policy. Now usually no one ever explains what this actually means and what you should do. Should you assign your personal policy to them? Do you need to get a new one? There are many different options and while no one will stop you from doing either of them, there are different considerations to be made when making that decision. What is a Collateral Assignment? When getting a loan for a dental practice, the bank will almost always require the borrower to assign to them a life insurance policy that will cover the amount of the loan for the term of the loan. It basically means that if the borrower were to pass away during the loan term, the bank still gets the money they were owed, and the loan is paid off by that life insurance. If that is a requirement from your bank, then there is no getting around having to assign the policy to them with the help of your agent. Should I Assign My Current Policy or Get Another One? The first point we always help our clients to make is that personal life insurance is just that, personal! It is almost always in someone’s best interests to separate church and state in a sense when thinking about their own finance’s vs the finances of their business. If you already have a personal life insurance policy, that’s great! That policy is meant for your family and next of kin if you pass away. However, while the prospect of having to get life insurance again may not be what you were hoping for, the flip side is that if you were to assign that policy to the bank and then pass away, your family will most likely not get the payout they were planning to live on. Reason is, because the bank will need to satisfy their loan, and that is exactly what is avoided with the concept of separating business vs personal finances and getting a second policy! What Does Getting a Second Policy Entail? It’s fairly simple since it is the exact same process as the first! Starting with figuring out the term and amount of the loan, getting a quote, filling out the application and then getting the policy! Term life insurance tends to be very cost effective for most people when it comes to the amount and terms one needs for the collateral assignment. So, it is almost never an issue with budgeting or cost as well! There is also the added benefit, because it is exclusively tied to the loan, if you pay it off early you can always cancel the policy since it wouldn’t be needed anymore. Along with that, since the bank is not the beneficiary of the policy, but the assignee is, there is still a beneficiary as well (still usually your family or next of kin). So, if the worst still does come to pass and the practice is paid 50% off, then the bank still gets what is owed to them. But then the beneficiary may get something that they weren’t expecting during a hard time too. I hope that helps all the new practice owners out there! We at CFS Dental Division are always here to help and work in your best interest to figure out what is going to not just be best for you now, but in the future as well! Written by: TJ Stanton