You have high income as an orthodontist, so your livelihood and all those additional years of schooling are worth protecting. There are many different types of professional insurance you’ll need—but as busy as you are, where should you even begin?
Loyall Group has guided countless orthodontists and other dental specialists towards finding the most comprehensive professional insurance coverage for their needs. We don’t use a lot of jargon, and we work hard to help you understand what you’re buying. Below, we’ll help you learn what to look for and what to avoid when buying the necessary insurance for yourself and your practice.
The “Big 5” Types of Professional Insurance
There are five main categories of professional insurance that orthodontists should have if they own a practice:
- Disability Income Insurance protects you in the event that you experience some accident or sickness that prevents you from doing orthodontics. In addition to personal disability income insurance, it’s also a good idea to buy a separate policy that covers the key fixed expenses of your practice.
- Life Insurance can protect your legacy and guarantees that your beneficiaries will have money in the event that you pass away.
- Malpractice Insurance can help cover the costs of defending a negligence claim by one of your patients (along with damages awarded in a civil lawsuit).
- Business Personal Property Insurance can help cover property damage inside and near your building, as long as it is not part of the permanent structure.
- General Liability Insurance can help cover claims that arise during normal business operations—such as property damage, physical injury, defense costs, and personal and advertising injury (e.g., libel, slander, or copyright infringement).
Professional Insurance Must-Haves for Orthodontists
The following figures represent our suggestions for minimum coverage in each of the main professional insurance types. Every practice is different, but sometimes it helps to know what your peers are doing. In the thousands of files we’ve reviewed, here are some of the average coverage amounts that we’ve seen:
Minimum Coverage for Practice Owners:
- Disability Insurance: on average, we see that new-to-practice orthodontists have between $7,500-10,000/month of coverage. If you want to go above $15,000/ month, you’ll need to go through a combination of two carriers. For orthodontists who have had their practice for years, we see an average of $20,000-$25,000/month of coverage.
- Life Insurance: we recommend buying separate policies to cover the amount of your practice loan and to cover you personally. In our experience, the average amount of personal coverage for practice owners is about $2,000,000 (but it always depends on the situation).
- Malpractice Insurance: the industry average for malpractice insurance is $1,000,000-$3,000,000.
- Business Personal Property Insurance: your minimum coverage here depends on the value of the property at your practice. If you already have business personal property insurance, have it periodically reviewed to make sure you’re still paying the most competitive premiums.
- General Liability: since many kinds of claims can fall under general liability, it’s best to aim high. We typically see at least $1,000,000 of coverage per occurrence and $2,000,000 of aggregate coverage per year.
Minimum Coverage for Residents
What kind of insurance should residents get? Residents, of course, don’t often need to get business personal property or general liability insurance since they don’t own a practice yet. However, you’ll still want to focus on getting disability and life insurance coverage, no matter what. You are your greatest asset, so you’re always worth protecting.
- Disability Insurance: there are a lot of special programs available for residents that allow them to get up to $7,500/month of coverage. There are many changes that happen in these programs from year to year, so an insurance broker that specializes in working with orthodontists can guide you towards the best current and available offerings.
Why would you want insurance as a resident? Well, you want to lock down your insurability in the event that your health changes—so the earlier you start the process of securing your insurance the better your outcome is likely to be.
The best strategy is to buy coverage in your first year of residency and lock down your health underwriting. Since most residents are recent graduates, it’s also good to have a rider that covers your student loans.
- Life Insurance: often, we see that single residents choose not to purchase life insurance. However, residents who are married typically have about $1,000,000 in coverage.
What Riders & Policy Add-Ons Should You Consider?
There are a few specific key areas that orthodontists should hone in on when researching professional insurance coverage. Here are some important riders, add-ons, and clauses that you will want to look for.
For Disability Insurance
- Pay attention to how Future Increase Option Riders work. We’ve talked about these in previous articles, but they allow you to purchase additional coverage over time without going through further medical underwriting.
Keeping the language in your policy consistent means your insurer can’t add exclusions or make other changes that might affect your claim eligibility in the future. These policies differ significantly from company to company, but your insurance broker can easily explain these differences.
- New-to-practice owners and residents should also look for Student Loan Riders, which are relatively new. These riders have the potential to cover some or all of their student loans in the event that they become totally disabled.
For Life Insurance
- The best strategy for buying life insurance is to lock in a fixed premium at a young age. Generally, the older you are when you purchase life insurance, the more risk your insurer faces—so they’re going to charge you higher premiums. Every year you delay getting life insurance, the higher the cost becomes.
- However, buying your life insurance young can allow you to lock in the same premiums for decades. Today there’s even a new 40-year level term insurance policy that literally lets you pay the same premiums for 40 years!
For Malpractice Insurance
- For malpractice insurance, we typically recommend purchasing an occurrence policy instead of a claims-made policy whenever possible. On average, we see $1,000,000 per occurrence and $3,000,000 in aggregate coverage.
Find the Professional Insurance that Fits Your Career
This blog post is just the tip of the iceberg for things you need to know as you begin your research journey. An insurance firm that specializes in working with orthodontists can save you time and endless Google searches, provide you with guidance, show you the top carriers, and help you understand what you’re looking at and buying.
DISCLAIMER: The information on this website is provided with the understanding that neither the Loyall Group, nor the authors of content provided or otherwise accessed on this website are engaged in rendering actionable financial, legal, accounting, tax, medical, veterinarian, or other professional advice and services. The information and guidance provided here should not be used as a substitute for consultation with professional financial, accounting, tax, legal, medical, veterinarian, or other competent professionals. Before making any decision or taking any action, you should consult a qualified professional. A more comprehensive summary of our policies in this regard can be accessed here.