PRACTICE MANAGEMENT
Insurance: A Necessary Evil (Part I) By: Joe Strunk, Owner/ CEO of 3000 Insurance Group Property insurance limits and risk management tips help reduce potential dental practice claims. Property Insurance can encompass your building or improvements and betterments to your leased space, as well as your business personal property, also known as contents. Well-written insurance policies are on a Replacement Cost form. This means that if your property is damaged, your insurance company will pay to replace the damaged property with new property of a similar kind and quality. Limits of Insurance Tip Issue: It is imperative you review your insurance limits regularly. The cost of construction, inflation, supply chain issues, and lower availability of skilled labor contribute to most property-related insurance claims being underinsured when the claim occurs. Solution: Here are some simple tricks to help you determine if your limits of insurance are enough. • Building: Speak to a contractor who builds medical/dental buildings. Ask them to give you a ballpark cost per square foot to rebuild a medical/dental structure in your area with similar construction. • Leasehold Improvements : Always read your lease to determine exactly what you are responsible for insuring. If your landlord built out the space, they could likely give you an appropriate figure to do so again. Several real estate brokers will help you determine the proper amount. Remember, most leases make you responsible for the Leasehold Improvements in your space, especially if they were placed in your space by you or on your behalf. • Business Personal Property: This would be anything you would take with you if you left the occupied space. We usually refer to this as “contents.” A good rule of thumb is to multiply the number of operatories you have by $80,000 to $100,000. Each operatory may not cost this much to replace. Still, some shared items in the dental practice add up, such as computers, panoramic x-ray, crown milling, cone beam, dental supplies, waiting room furniture, etc. Those must be accounted for. In most cases, we have found that if you use this formula, you are pretty close to the limit of insurance you need. Alternatively, you could contact your dental sales representative or tech people and inquire about the replacement cost of your equipment should a catastrophe occur. Risk Management Tip Issue: Water damage from a broken pipe or a broken water supply connection from a dental fixture continues to be the leading cause of claims in a dental practice. A typical Water Damage claim can keep a dental office closed for 6-8 months. Although insurance will 34 journal | july/august 2022
pay for this type of claim, it puts a lot of stress on the dentist. The dentist sometimes has to find temporary space(s) to treat patients, not to mention the time to work with the insurance company and contractors to repair the space. Solution: Install an automatic or manual water shutoff valve. Make it part of your routine to shut off the water supply to your office when you leave the practice each afternoon/evening. This will prevent or significantly reduce a water damage claim. Don’t miss the next article, Insurance: Necessary Evil Part II, where we will discuss filling the “gaps” in your insurance policy for your Dental Practice. ABOUT THE AUTHOR
Joe Strunk, owner/ CEO of 3000 Insurance Group, started in insurance in 1997. He has an engineering degree from Oklahoma State University and a MBA from the University of Oklahoma. Joe has served as the President of the Independent Insurance Association of Oklahoma and holds designations as a Certified Insurance Counselor, Certified Advisor of Personal Insurance, and Certified Risk Manager. With over 25 years of experience, Joe specializes in working with Professional Associations and small businesses to satisfy their Property, Casualty, Life, and Health insurance needs.
3000 Insurance Group, an ODA Rewards Partner, is independently owned and locally operated to handle your insurance needs. We focus on Oklahoma City and offer affordable and reliable insurance choices across Oklahoma. We help you find the right combination of tailored, personalized insurance coverage at just the right price to fit your needs.
