Dentists: Consider cost of replacing equipment


Consider the cost of replacing equipment at today’s prices.


No one thinks it will happen to them, but all too often, it does: a fire destroys the building in which your dental office is located. Or a tornado rips through your town, leveling your office. No one expects a total loss, but it can happen.

A bad situation can be made worse if you find you don’t have enough limits of insurance to get you back in business. For example, a dentist’s office in a Midwestern state was destroyed by a fire. The dentist had business personal property (BPP) coverage for $200,000, but it cost $700,000 to replace everything.

Sometimes a dentist in business for 20 years may have nearly the same BPP policy limit as when the office opened. But consider:  Is the cost to replace  your equipment – chair and materials –  the same today as it was 20 years ago? Do you charge the same for a crown today as you did 20 years ago?

Dentists typically consider the investments they have made in upgrades and improvements when determining BPP limits, including furniture, carpet, desks, instruments, chairs, operatory equipment, x-ray machines, cone beam radiography machines and CAD/CAM machines. But it is all too easy to overlook the cost of retro-fitting a standard office building for use as a dental office: the additional plumbing, wiring and other features necessary to accommodate dental equipment.

From my experience, a reasonable BPP value is about $70,000 per operatory (a dental chair in a separate exam room) plus the replacement value of any equipment not ordinarily in every dentist’s office, such as a cone beam or CAD/CAM machine. For example, a dentist who has four operatories and a CAD/CAM machine that costs $130,000 needs a minimum BPP limit of $410,000 to restore operations.

Coverages described here are in the most general terms and are subject to actual policy conditions and exclusions. For actual coverage wording, conditions and exclusions, refer to the policy or contact your independent agent. Claim scenarios are for educational purposes only. Every claim is adjusted according to its own specific set of facts. Whether or not insurance coverage would apply to any claim is dependent on the facts and circumstances of each individual claim and the language of the insurance policy.

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