Your business has been going well, and your turnover has increased, making more profits. What you may not have taken into account is to review your Surgery insurance, in particular, the Business Interruption part of the policy. Generally, dentists keep renewing the same surgery insurance policy; if it is not reviewed, the policy may not be fit for purpose.
When a major incident occurs at the practice, such as a fire or flood, you may instantly think about the buildings, contents or specialist dental equipment which will be damaged and the cost of replacing them. But what you need to consider is the impact the incident may have on your gross revenue. If you have to close for a period of time, you need to ensure you have adequate provision within your insurance to cover this; it is known as Business Interruption Cover.
We do come across many practices where the turnover has increased significantly; however, the insurance cover has never been reviewed and updated, resulting in an underinsured practice. If the worst happens and you are underinsured, you may not get sufficient to repair the surgery and get yourself up and running as soon as possible. It is essential to review the policy and make sure your cover is up to date and current.
Business Interruption Cover covers a number of potential scenarios which could lead to the loss of revenue at the practice, and you should ensure your policy covers the following:
You will also need to check with your current insurance provider what excess period your policy has under the Business Interruption section. The excess period is the time-frame that needs to expire before your policy will cover you.
Finally, do check you have adequate cover in respect of the indemnity period your practice has, should it need to close for repairs. Whilst it may be possible to get your practice back up and running within 12 months, for many properties, this isn’t possible. Consideration needs to be made in respect of the planning regulations and processes, particularly if you have a listed property, as the process can take significantly longer than a year. We would recommend for listed properties an indemnity period of between 2 and 3 years, and for all other properties a minimum of 18 months.
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