Multi-Location Dental Practice and DSO Insurance Guide

When a dental practice expands to multiple locations, its approach to insurance coverage must evolve accordingly. The structure and design of the coverage plan will require careful consideration, and while the process differs from insuring a single practice, it does not need to be complicated.

Core insurance policies for a single-office dental practice

• Professional liability (PL): Also known as dental malpractice insurance, this policy covers the actions of the practice owner and staff, with the practice entity named as an additional insured.
• Business owners policy (BOP): Includes property, general liability, embedded employment practices liability (EPL), and data breach/cyber liability coverage. While commonly used, the cyber liability limits in a BOP are often insufficient even for a single practice. A separate data breach and cyber policy should be considered.
• Workers’ compensation (WC): Protects employees in the event of work-related injuries or illnesses.

These policies adequately cover a single office, but fall short when applied to multiple entities.

Challenges of insuring multi-location dental practices

When a dentist opens a second location, often under a new legal entity name, the typical approach is to replicate this coverage. A new BOP and Workers' Compensation policy is purchased, ideally mirroring the first practice. Associate dentists may be required to carry their own PL policies, and the practice owner may ask the associate to add the entity name as an additional insured.

On the surface, this approach may appear to have addressed the risks, but it immediately creates gaps and unnecessary complications in coverage. Additionally, the ownership team has surrendered a margin of control over the insurance protecting the practice. As the practice continues to grow, this fragmented approach to insurance often continues, further complicating the coverage structure.

Common problems with piecemeal insurance

• Coverage gaps: Overlapping or conflicting policies leave practice owners underinsured in critical areas.
• Redundancy: Duplicate EPL or cyber coverage inflates costs unnecessarily.
• Scattered oversight: Multiple policies make it hard to oversee and manage the practice’s insurance portfolio.
• Excessive costs: Surplus lines PL policies and high umbrella liability limits are common, increasing expenses without adequate justification.

The piecemeal approach is difficult to fully grasp how underinsured the practice might be in critical areas. As the cost and administrative burden of managing numerous policies becomes overwhelming, the practice may seek the help of an insurance professional.

Partnering with a specialty broker

Partnering with a specialty insurance broker familiar with the unique risks of the dental industry will ensure the practice obtains adequate coverage at the appropriate cost. A specialist insurance broker can help streamline your coverage by creating an insurance program built using one master insurance policy for every area of coverage.

Key benefits of a master policy

1. Clear, unified coverage
   • A program built for professional liability, property, general liability, workers’ compensation, and data breach/cyber liability.
   • Management liability coverages (EPL, directors and officers, fiduciary, and crime coverage) are integrated.
2. Scalable and cost-effective
   • Coverage grows with your practice, reducing redundant costs and administration.
3. Streamlined management
   • Simplifies oversight by having one program built to protect all locations under a single plan.

Additional benefits of working with a specialty broker

In addition to designing a master policy, an experienced insurance team builds a program designed to make practice management easier. Working with a specialty broker will include:

• Risk assessments: Evaluate current insurance portfolio for gaps and inefficiencies.
• Ongoing support: Adapt policies as your practice expands or regulations change.

Securing the future of your dental practice

For a growing dental practice, patchwork insurance creates costly vulnerabilities. Transitioning to a master insurance policy offers a scalable, comprehensive, and streamlined solution. By partnering with a skilled broker, group dental practices can confidently reduce risks and focus on growth.

Consulting a dental-specific insurance professional is the first step toward optimizing coverage. With their guidance, you can protect your practice, employees, and patients while maximizing efficiency and minimizing costs.