A business owner policy, frequently abbreviated to ‘BOP,’ is an insurance policy you would buy to protect your business from a wide variety of property and casualty risks. Bundled into a single package, a BOP 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. One thing you need to remember as a dental practitioner is that you are not running an ‘average business.’ You have special needs and will want to make sure that your BOP is suited to the specific nuances of your practice. 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.
You should work with an agent who truly understands your marketplace, and will help you identify insurance companies that allow for strong medical and dental endorsements.
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.
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. If your office burns to the ground, and you lose paper or electronic records that are not backed up, you may not be able to prove how much you had in accounts receivable. Base coverage in a BOP policy is usually not sufficient and needs to be reviewed and tied to your average accounts receivable balance.
Another area that is frequently misunderstood by dental practitioners is auto coverage. 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.
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. As a result, often a lease agreement is not a priority and this is where trouble ensues. 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.
The take-away?
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 your practice, and put into place the necessary modifications to make your policy strong.
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 the highest level of service.