Insuring your business with the best possible terms and cover is hugely important, yet it is all too easy to simply agree to the first set of renewal terms received and continue with the existing insurer. In doing so, dental practices could be missing out on a better value for money contract and, in any event, cover should be regularly reviewed to ensure that adequate insurance is provided and that it remains relevant to the practice’s needs and circumstances.
I am not advocating changing your insurer each and every year; that can prove detrimental in the long term. Establishing a long-term business relationship with a broker that understands your business and the risks it faces can bring great benefits.
Equally, having a stable insurance history can help – changing insurers regularly for relatively small premium savings is obviously appealing from an immediate cost saving point of view, but you need to consider more than price. The policy wording, levels of cover, service, claims process and history should all be considered.
However, that all said, it is well worth checking your cover regularly to ensure the sums insured and coverage provided remain in line with your requirements and, if nothing else, provide reassurance that your existing provider is offering a competitive and comprehensive contract.
There are a number of key areas within a typical package insurance policy. The following is a brief review.
Ideally, this would be all risks cover to ensure that premises are fully reinstated in the event of the worst happening, so including ‘accidental damage’ for example. You therefore need to make sure that the sum insured accurately reflects the cost of rebuilding the property in a worst-case scenario.
At the time of purchase, a survey will be carried out on the premises and will provide a rebuild cost for insurance purposes, but this needs to be kept up to date. Your sum insured is normally kept in line with increasing costs via index linking, or some policies will provide a headline sum insured within which most practices will fall.
Additionally, you must keep your insurance broker or insurer informed of any changes to your property that will affect its value – for example, building an extension or upgrading the quality of the interior fittings.
Again, this should be on all risks basis to cover all eventualities. You should also seek for a contract to cover aspects such as loss of money, medical bags, equipment etc.
Additionally, practices have an increasing need and reliance on computers. It is crucial to ensure your IT equipment is adequately insured, and that in the event of a claim, new equipment will be quickly provided to ensure the practice can be up and running in the shortest time possible.
If you do not have computer cover, you do not benefit from the reinstatement of data lost as a result of the damage to the computer.
The provision of such cover is not guaranteed and will depend on the history of the property or surrounding area – you should check whether subsidence is covered and not merely assume that it is. In the event of a claim, the excess (that is the amount you have to pay) is normally subject to an increased excess, typically £1,000.
Like any other organisation, dental practices are required by law to have employers’ liability (EL). All practice policies will carry EL cover as well as public liability (PL) cover.
Revenue protection/business interruption
In the event of a material damage claim to your property, if your practice had to close even for a short period, your income would drop yet you would still need to pay bills and wages. Business interruption is available to cover this eventuality.
Cover is available for gross fees and other practice income, which would include loss of income for professional services and the additional expenditure needed to avoid a reduction in your income. The increased cost of working would include relocation costs, advertising and increased rents.
Richard McEwen is director of general business at Dental Insurance Services (a trading name of RJ Hurst & Partners Ltd, authorised and regulated by the Financial Conduct Authority), based in Chelmsford.