What Insurance Do You Need When Buying a Dental Practice?

What Insurance Do You Need When Buying a Dental Practice?

More than 7,000 dentists graduated from U.S. dental schools in 2025, the first time the number has crossed that mark. And while younger dentists are becoming owners later than previous generations, research from the ADA Health Policy Institute suggests practice ownership is still the eventual path for many dentists.

But how many dentists know what insurance they actually need when they become an owner?

This is not a topic most dentists spend much time learning in dental school.

And unless you worked for a very business-savvy practice owner or a DSO that exposed you to the business side of dentistry, you may not learn much about it as an associate either.

You probably have some familiarity with malpractice insurance. Maybe your previous practice paid for it. Maybe you carried an individual policy. Either way, you knew it was there.

Once you buy a dental practice, the picture gets much bigger.

Now you have equipment. Employees. Patient information. Payroll. Revenue. Business debt. Employment exposure. Cyber exposure. And potentially other dentists working in your practice.

So, what insurance do you actually need when buying a dental practice?

Let’s go through it.

1. Business Owner’s Policy

I would start here.

A Business Owner’s Policy, commonly called a BOP, is one of the foundational parts of business insurance for a dental practice.

A BOP typically combines three major coverages:

• Commercial property
• General liability
• Business income

Commercial property insurance helps protect the physical property your practice depends on. That can include dental chairs, imaging equipment, computers, furniture, supplies, tenant improvements, and other business property.

If you are buying the building along with the practice, the building itself may also need to be insured.

General liability addresses certain third-party bodily injury and property damage claims. Think about a patient slipping in your office or your practice accidentally damaging someone else’s property.

Then there is business income coverage.

This becomes important if a covered property loss temporarily shuts down the practice.

Your production may stop immediately.

Payroll, rent, loan payments, utilities, and other expenses do not necessarily stop with it.

That is why I look at the BOP as the foundation of the commercial insurance program.

You can add other coverages around it, and we are going to look at those individually, but this is where I would start.

You can also read our deeper explanation of business interruption insurance for dentists if you want to understand how lost-income coverage works when a practice has to temporarily close.

2. Dental Malpractice Insurance

This is probably the insurance you are most familiar with.

If you worked as an associate before buying your practice, there is a good chance you already had some interaction with dental malpractice insurance.

Maybe your employer provided it.

Maybe you carried your own policy.

Either way, once you become an owner, you need to understand how malpractice coverage fits your new practice structure.

Dental malpractice insurance, also called professional liability insurance, helps protect a dentist when a patient alleges that professional treatment or services caused injury or harm.

Depending on the policy, it may help with legal defense costs, settlements, judgments, and other expenses associated with a covered claim.

You will also have to understand two common policy structures: occurrence and claims-made coverage.

Occurrence Coverage

An occurrence policy generally responds based on when the treatment or incident occurred.

If the covered treatment took place while the occurrence policy was active, that policy can generally respond even if the claim is made later, subject to the policy terms.

Claims-Made Coverage

A claims-made policy generally responds based on when the claim is made and reported, subject to the policy’s retroactive date and other requirements.

That makes concepts such as prior acts coverage and tail coverage important when moving between policies.

You do not need to become an expert on every detail before buying your practice.

But you do need to make sure your transition into ownership does not create a coverage gap.

There is another difference now too.

You are no longer necessarily thinking only about yourself.

If your practice employs associate dentists, you need to understand how those dentists are insured and whether the practice entity itself has appropriate professional liability protection.

3. Cyber Insurance and EPLI

I group these two together for a reason.

These are two of the areas where I most often see dental practices carrying lower limits than I would expect based on the exposure.

Sometimes a practice owner sees a small cyber endorsement or EPLI endorsement attached to a larger business policy and assumes that exposure is fully handled.

Then you look at the actual limit.

Cyber Insurance

When you buy a dental practice, you are not just buying chairs and equipment.

You are taking responsibility for:

• Patient records
• Protected health information
• Practice management systems
• Email accounts
• Payment information
• Computer systems
• Vendor connections
• Other sensitive data

A cyber policy may help the practice respond to covered events such as ransomware, data breaches, phishing attacks, network interruption, and other cyber incidents.

Coverage may include:

• Forensic investigation
• Patient notification
• Data restoration
• Cyber extortion
• Business interruption
• Regulatory response
• Certain third-party claims

Do not automatically assume a small cyber endorsement attached to a BOP provides the same protection as a broader standalone cyber policy.

Look at the limits.

Look at the sublimits.

Look at what is actually covered.

Cyber is one of the exposures that should be specifically reviewed as part of your overall dental practice business insurance program.

Employment Practices Liability Insurance

EPLI addresses another exposure you take on immediately when you become an owner:

Employees.

Employment Practices Liability Insurance can help protect the practice from certain covered allegations involving things such as:

• Wrongful termination
• Discrimination
• Harassment
• Retaliation

If you are buying an established practice, you may be acquiring a team that has worked together for years.

You are now the owner.

You may change responsibilities.

You may change compensation.

You may hire new people.

You may terminate someone.

You may completely change the culture of the practice.

Those decisions create an exposure you did not have in the same way as an associate.

That is why I want owners to look at their actual EPLI limits instead of simply seeing the letters “EPLI” somewhere on the policy and assuming everything is handled.

EPLI is another coverage we evaluate as part of business insurance for dental practices.

4. Equipment Breakdown Insurance

This one is straightforward.

Dental practices depend heavily on equipment.

You may have:

• Compressors
• Vacuum systems
• X-ray equipment
• Intraoral cameras
• Sterilization equipment
• HVAC systems
• Electrical systems
• Other specialized equipment

Commercial property insurance is generally designed around covered causes of property damage.

Equipment breakdown coverage addresses certain types of mechanical or electrical breakdown that may not be treated the same way as an ordinary property loss.

And the equipment itself is only part of the problem.

If a critical compressor or other system fails, what does that do to production?

You could be paying for a repair while also losing appointments.

Equipment breakdown is commonly considered alongside the BOP and other business insurance coverages for a dental practice.

5. Workers’ Compensation

If you are buying an existing dental practice, there is a good chance you are also taking over a team.

That means workers’ compensation needs to be addressed as part of the acquisition.

Workers’ compensation can provide benefits when an employee suffers a covered work-related injury or illness, including medical expenses and a portion of lost wages.

The legal requirement varies by state.

For example, North Carolina generally requires businesses with three or more employees to carry workers’ compensation, subject to certain exceptions.

So I would not tell you that every dental practice in America is automatically required to carry it.

I would tell you this:

If you have employees, find out what your state requires before you take ownership.

And do not assume the seller’s workers’ compensation policy automatically becomes yours at closing.

Your new business entity needs to have the appropriate coverage in place.

Workers’ compensation is generally one of the more straightforward parts of a dental practice’s business insurance program.

6. Employee Benefits

There is another employee-related issue that can get overlooked during an acquisition:

What happens to the benefits?

If the practice you are buying currently offers:

• Health insurance
• Dental insurance
• Vision
• Group life
• Short-term disability
• Long-term disability

you need to understand what happens to those programs when ownership changes.

You may decide to continue essentially the same benefits.

You may replace them.

The new business entity may need a new benefits arrangement.

Either way, it is something to address before employees start asking what happens to their health insurance after closing.

Benefits can also play an important role in keeping a good existing team through an ownership transition.

You can learn more about employee benefits for dental practices and how benefits fit into recruiting and retaining your staff.

7. Commercial Umbrella Insurance

An umbrella is basically another layer of liability protection.

Let’s say an underlying liability policy provides a $1 million limit and you have a covered claim that exceeds that amount.

A commercial umbrella may provide additional limits above certain underlying policies, subject to the umbrella policy’s terms.

The important part is understanding what the umbrella actually sits over.

Commercial umbrellas commonly provide additional limits above policies such as:

• General liability
• Commercial auto
• Employers liability

But do not automatically assume the umbrella extends over dental malpractice, cyber, or every other policy you carry.

Look at the underlying policies and the actual contract.

The concept is simple:

You are buying another layer of protection against a large liability claim.

As the practice grows, adds employees, acquires more assets, or adds additional locations, that extra layer can become more important.

Commercial umbrella coverage is another part of the broader business insurance program we review for dental practices.

8. Crime and Employee Dishonesty Coverage

This is one I think more dental practice owners need to pay attention to.

Crime and employee dishonesty coverage can help protect a practice from certain losses involving:

• Employee theft
• Embezzlement
• Forgery
• Funds transfer fraud
• Other covered dishonest acts

And this is not just a theoretical risk.

I was recently at a dental continuing education event and had a conversation with a practice owner that stuck with me.

His office manager had been with the practice for around 20 years.

He trusted her.

Eventually, she retired and he brought in a new office manager.

Because he had spent two decades working with someone he trusted, he treated the new office manager the same way. He gave her a tremendous amount of access and freedom over the practice’s financial accounts.

Eventually, he discovered that the new office manager had embezzled around $50,000 from the practice.

He had insurance.

The problem was that he did not have enough coverage.

The amount above his limit came out of his pocket.

There are two lessons here.

The first is insurance.

Look at your crime and employee dishonesty limit and ask yourself whether it would actually be enough if someone stole a meaningful amount of money from your practice.

The second is internal controls.

Insurance is not a substitute for good financial procedures.

You should know:

• Who can move money?
• Who reconciles the accounts?
• Who has access to checks?
• Who has access to credit cards?
• Does one employee have too much control over the financial process?

Trust your team.

But have controls.

Crime and employee dishonesty are exposures worth reviewing within your dental practice business insurance.

9. Disability Insurance

This is where we move away from protecting against a fire, lawsuit, or employee claim and start thinking about you as the owner.

Dentistry is physical.

Your ability to earn an income depends directly on your ability to perform precise clinical work.

What happens if an injury or illness prevents you from practicing?

That is where disability insurance for dentists comes in.

Individual disability insurance is designed to replace a portion of your income if a covered disability prevents you from working.

For dentists, the definition of disability matters.

An own-occupation policy may treat your inability to perform the duties of dentistry differently from a policy that focuses more broadly on whether you can work in another occupation.

When you buy a practice, disability becomes even more important because your personal income may now be tied to a business that also has significant debt and overhead.

10. Business Overhead Expense Disability Insurance

Individual disability insurance helps protect your income.

But what protects the practice?

Imagine you buy a dental practice and six months later become disabled.

You may still have:

• Rent
• Payroll
• Utilities
• Insurance premiums
• Loan payments
• Equipment expenses
• Other operating costs

That is where business overhead expense disability insurance can play a role.

This coverage is designed to reimburse certain covered business expenses while an insured owner is disabled.

This can be particularly important early in practice ownership.

You may have just borrowed a significant amount of money to acquire the practice.

You have employees depending on the business.

You have overhead every month.

And a substantial portion of the practice’s revenue may depend directly on your production.

That makes disability risk more than a personal insurance issue.

It becomes a business issue.

Business overhead expense coverage is closely connected to the larger disability planning conversation, which is why we discuss it as part of our disability insurance planning for dentists.

11. Life Insurance and Buy-Sell Funding

Life insurance can also become a business decision once you own a dental practice.

If you financed the acquisition, have a family depending on your income, or own the practice with another dentist, there may be significant financial obligations tied directly to you.

Life insurance for dentists can play several different roles.

Protecting Your Family

If something happens to you, your family may suddenly be dealing with both a personal loss and a business interest that needs to be sold, transferred, or managed.

Life insurance can provide liquidity while those issues are worked through.

Protecting Business Debt

You may have a significant practice acquisition loan, real estate loan, equipment debt, or other obligations.

Life insurance can be part of the strategy used to address those obligations if an owner dies.

Funding a Buy-Sell Agreement

This becomes especially important when multiple dentists own the practice.

A buy-sell agreement establishes what happens to someone’s ownership interest after certain triggering events.

One of those events is often death.

But an agreement that says one owner must buy another owner’s interest creates a practical question:

Where does the money come from?

Life insurance may provide funding for that transaction, depending on how the ownership agreement and insurance are structured.

12. Disability Buy-Out Insurance

Death is not the only event that can create an ownership problem.

What happens if one owner becomes permanently disabled and can no longer practice?

A buy-sell agreement may require the remaining owner or business to purchase the disabled owner’s interest.

Again, the question becomes:

Where does the money come from?

Disability buy-out insurance can be designed to help fund the purchase of a disabled owner’s business interest under a properly structured buy-sell agreement.

This is different from personal disability insurance.

Personal disability coverage helps replace income.

Business overhead expense coverage helps with ongoing practice expenses.

Disability buy-out coverage helps address the ownership interest itself.

If you are buying a dental practice with another dentist, life insurance and disability planning should be considered alongside your buy-sell agreement, not as completely separate decisions.

For more on these areas, see our pages on disability insurance for dentists and life insurance for dentists.

Other Coverage You May Need

Those are the major areas I would look at, but every dental practice acquisition is different.

Depending on the practice, you may also need to consider:

• Flood insurance
• Commercial auto
• Hired and non-owned auto
• Additional business income protection
• Building coverage if real estate is involved
• Higher property limits
• Coverage for additional locations
• Specialty-specific exposures

The point is that buying a dental practice should not be treated like buying one generic business insurance policy.

You are buying a functioning business.

The insurance should reflect how that particular business operates.

What Should You Gather Before Closing?

Do not wait until the last few days before closing to start thinking about insurance.

As you move toward ownership, gather:

• Current insurance policies
• Loss runs or claims history
• Practice revenue
• Payroll
• Employee count
• Building information
• Lease information
• Dental equipment and property values
• Associate dentist information
• Existing malpractice arrangements
• Employee benefits information
• Cybersecurity information
• Loan and lender requirements
• Your expected closing date

Then review what the seller currently has.

Some of it may be appropriate for you.

Some of it may not.

And you should not assume the seller’s insurance policies automatically transfer to your new entity.

The goal is simple:

When ownership changes, there should not be an insurance gap.

Final Thought

Buying a dental practice changes your insurance needs almost overnight.

As an associate, your biggest insurance concern may have been malpractice.

As an owner, you now have to think about protecting:

• Your professional liability
• Your building and property
• Your equipment
• Your income
• Your employees
• Your patient data
• Your business assets
• Your ability to work
• Your ownership interest
• Your family
• Your business partners

It can sound like a lot.

But when you break it down piece by piece, it becomes manageable.

Start with the foundation.

Understand what each policy is supposed to protect.

Then make sure the limits and policy structure actually match the dental practice you are buying.

Buying a Dental Practice? Let’s Talk Before You Close.

At Insurance by Dentists, we focus specifically on dentists and dental practices and work with multiple insurance companies to help practice owners put the right coverage in place.

If you are buying a dental practice, we can walk through the practice with you, review the major exposures, look at what coverage needs to be in place, and help make sure you are not walking into ownership with an avoidable gap.

Schedule a free, no-obligation call with Insurance by Dentists.