10 Commonly Overlooked Items in a Business Owner’s Policy

A Business Owner’s Policy (BOP) is designed to provide foundational protection for a dental practice by combining property and general liability coverage into one policy. While many dentists carry a BOP, several important coverage gaps and limitations are commonly overlooked until a claim occurs.

As dental practices become more technology-dependent and operationally complex, it is important to periodically review your policy to ensure your coverage still aligns with how your practice operates today. If you haven’t reviewed your coverage recently, now is a good time to start – learn what to look for when shopping your dental practice insurance.

The items below are organized in approximate order of financial and operational impact to a dental practice.

1. Business Interruption Coverage: What Dental Practices Often Underestimate

Many practices underestimate how long full recovery can take after a significant property loss. Even when patient care temporarily stops, expenses such as payroll, rent, equipment leases, and loan obligations continue.

Specialized dental equipment can take months to replace, extending downtime well beyond initial expectations.

Review:

• Current business income limits
• Restoration period assumptions
• Waiting periods before coverage begins
• Utility interruption and dependent property coverage

2. Equipment Breakdown Coverage: A Gap in Standard BOP Property Coverage

One of the most common misunderstandings with a BOP is assuming property coverage automatically includes equipment failure.

Standard property coverage generally protects against events like fire, theft, or vandalism. Internal mechanical or electrical breakdowns are often excluded unless equipment breakdown coverage is added separately.

For dental practices that rely on digital imaging, computer-aided manufacturing systems, sterilization units, and other specialized technology, an unexpected equipment failure can create a significant financial exposure.

Review:

• Whether equipment breakdown coverage is included
• Coverage for key pieces of equipment in your practice
• Business interruption coverage tied to equipment downtime

3. Cyber Liability Insurance for Dental Practices: Why a Standalone Policy Matters

Dental practices store large amounts of sensitive patient and financial information, making them increasingly attractive targets for ransomware, phishing, and social engineering attacks.

The regulatory environment is tightening as well. In late 2024, the U.S. Department of Health and Human Services proposed the most significant overhaul of the HIPAA Security Rule in over a decade, with new requirements focused on electronic protected health information (ePHI), mandatory multi-factor authentication, and stricter breach response obligations. Practices that have treated security compliance as a checkbox exercise face greater exposure going forward.

Some BOPs include limited cyber endorsements, but those endorsements are often minimal and may not adequately cover the costs associated with a serious breach, ransomware recovery, or prolonged system outage. A standalone data breach policy typically provides broader, more responsive protection. Learn more about the types of insurance coverage dental practices should carry.

Review:

• Whether cyber liability is standalone or simply endorsed onto the BOP
• Coverage for ransomware, forensic investigation, and patient notification costs
• Business interruption coverage related to network outages
• HIPAA-related response and regulatory expenses

4. Tenant Improvements and Betterments: Protecting Your Dental Office Build-Out

Dental offices often involve substantial leasehold improvements, including custom cabinetry, plumbing, operatories, imaging rooms, and specialized electrical work.

Many landlords insure only the building shell, leaving the tenant responsible for rebuilding interior improvements after a loss. Practices that have expanded, renovated, or upgraded equipment over time may find their insured values are no longer adequate.

Review:

• Whether tenant improvements and betterments are specifically covered
• Current replacement cost estimates
• Lease language regarding rebuilding responsibilities

5. Water Damage and Sewer Backup Coverage for Dental Offices

Dental offices carry elevated water-related exposure due to suction systems, sterilization equipment, plumbing infrastructure, and mechanical systems throughout the operatories.

Many BOPs contain limitations or exclusions for sewer backup, mold remediation, or certain types of water intrusion, making this a frequently overlooked gap.

Review:

• Sewer and drain backup endorsements
• Mold remediation limits
• Water damage exclusions and limitations

6. Employment Practices Liability (EPLI): Managing HR-Related Claims at Your Dental Practice

Dental practices face increasing exposure to employment-related claims involving allegations such as wrongful termination, harassment, discrimination, or retaliation.

These claims are generally excluded from a standard BOP unless Employment Practices Liability Insurance (EPLI) is added separately. Even unfounded claims can generate significant legal expenses, and the cost of defending against them has risen considerably.

Review:

• Whether EPLI coverage is included
• Defense cost provisions
• Current staffing and HR-related risk exposures

7. Employee Theft and Internal Fraud: Coverage Your BOP May Be Missing

While many practice owners focus on external theft, internal financial fraud is often the greater risk. Dental practices are particularly vulnerable because billing, collections, and financial record access often rest with a small number of staff members.

Employee dishonesty coverage can help protect against losses involving embezzlement, forged checks, fraudulent transfers, and other forms of internal theft. These coverages are not always automatically included in a standard BOP.

Review:

• Whether employee dishonesty coverage is included
• Limits for forgery and fraud-related losses
• Protection for wire transfer and other scams

8. Accounts Receivable Coverage for Dental Practice Billing Records

Most dental practices rely on practice management software and digital patient records. If a fire, cyber incident, or system failure damages those records, the financial impact extends beyond replacing hardware.

Accounts receivable coverage helps protect the practice if patient billing records are damaged or destroyed and balances cannot be accurately collected. Many practices either carry very low limits or overlook this coverage entirely.

Review:

• Whether accounts receivable coverage is included
• Current coverage limits
• Whether electronic records are adequately addressed

9. Hired and Non-Owned Auto Liability: A Commonly Overlooked BOP Endorsement

Many dental offices have employees who occasionally use personal vehicles for practice-related tasks, such as making bank deposits, picking up supplies, attending continuing education events, or transporting records or equipment.

In the event of an accident, the employee’s personal auto policy may not fully cover a claim involving business use. A hired and non-owned auto liability endorsement can help protect the practice from resulting liability exposure.

Review:

• Whether staff members regularly use personal vehicles for business purposes
• Whether hired and non-owned auto liability is included

10. Ownership Structure and Insurable Interest: Aligning Your BOP with Your Legal Entities

Ownership structure can create unintended coverage gaps if policies are not properly aligned with the legal entities that own the building, equipment, or practice operations.

A building owned under a separate LLC, for example, may not be automatically covered under the operating entity’s BOP unless the policy is structured correctly. As more practices operate under DSO models or multi-entity arrangements, this alignment becomes even more important.

Review:

• Named insured entities on the policy
• Ownership structure for real estate and operations
• Whether all entities have appropriate insurable interest

Food for Thought

A Business Owner’s Policy is an important foundation for protecting a dental practice, but it should not be treated as a “set it and forget it” policy.

As practices evolve, add technology, expand services, or renovate facilities, coverage needs can change significantly. Explore your business insurance coverage options and consider scheduling a periodic policy review with an advisor who understands the dental industry. Identifying gaps before a claim occurs is far less costly than discovering them after one.

About Treloar & Heisel

Treloar & Heisel, an EPIC Company, 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.