Using Your Insurance: Contingency Plan Saves a Practice
When Neil Dicker, DDS, began practicing general dentistry in 1976, he had no idea that a disabling illness would force him to sell his business 30 years later. Fortunately, however, he had a contingency plan in place for just such a possibility. As the Orefield, PA, dentist put it, "If there was ever a rainy day, I didn''t want to be caught without an umbrella."
Dr. Dicker's contingency plan had three strategic components. First, he set aside savings for unexpected events like a disability. Second, he and several dentists formed a non-profit group to help each other if one of them became disabled. Third, he purchased two types of disability insurance.
With the dentists' group,members go into action almost immediately if a colleague is hit with a disabling illness or injury and cannot work.Members volunteer their time to treat the disabled dentist's patients so the practice stays open while the owner recovers or decides what to do next."We have a lot of trust in each other,which I think makes the group both powerful and unique," Dr. Dicker says. "My colleagues were so helpful to me when I became ill and could not practice."
INSURANCE SAFETY NET
Having adequate insurance was another component of Dr. Dicker's risk management plan. "Early in my career, other dentists advised me to get insurance in place so I would have a safety net for my family and my practice if something were to happen to me," he recalls.
Dr. Dicker purchased disability income insurance,which provides monthly income to a disabled dentist. He also bought the American Dental Association's (ADA) Office Overhead Expense insurance, which reimburses a disabled dentist for a number of business expenses. The ADA plan is underwritten and administered by Great-West Life & Annuity Insurance Company (Greenwood Village, CO).
When Dr. Dicker became disabled in 2005, both policies kicked in. "It was great to have the disability income benefit for my personal expenses, but it was especially important for me to know that my ADA Office Overhead Expense insurance was there to help pay my staff 's salaries and benefits, and cover other bills like utilities and rent," Dr. Dicker says.
Several months into his disability, Dr. Dicker came to the realization that he would have to sell his practice. Here again, his contingency plan paid off. "I was able to maintain the viability of my practice while I looked for a buyer, because I had the insurance benefit to reimburse certain overhead expenses, the other dentists to treat my patients, and my savings to fill in the gaps," he says. He found a buyer through a practice broker, and within 6 months, the sale closed.
Based on his experience, Dr. Dicker offers the following tips to other sole proprietors:
• Plan for the unexpected.
• Save money in an emergency fund.
• Consider forming a group of dentists who will volunteer to help keep your practice running if you are disabled and cannot work for several weeks or months.
• Have adequate disability insurance for both your personal and business needs.
• Buy from an insurance company that has experience working with dentists and a reputation for good service.
"When you are ill or injured, you are under a lot of stress," Dr. Dicker says. "If you have to file an insurance claim, you want an understanding human being on the other end of the phone who will help you get through this very vulnerable time. Debbie Wagner at Great-West Life provided that helping hand to me. It made me realize that a good relationship with an insurance company is as important as the insurance contract itself."
Editor's note: Dr. Dicker's statements were obtained by Great-West Life & Annuity Insurance Company, underwriter and administrator of the ADA Insurance Plans, relative to his coverage under Group Policy #1106GDH-OEP, and reprinted with permission. For more information, visit www.insurance.ada.org or call 888-463-4545. This article does not constitute legal, tax, or financial advice; please seek professional input as appropriate to your situation.