Protecting Your Team, Your Income, and Your Family When Life Takes an Unexpected Turn
Running a dental practice means patients rely on you. Your team relies on you. Your family relies on you. But what happens if, whether due to injury, illness, or a medical emergency, you suddenly can’t work? It happens a lot more than you think, in fact a study of bankruptcy filings found that 77.8% of debtors cited income loss as a contributor to their bankruptcy. This included 44.3% specifically citing medically-related work loss as a contributor.1
Most dentists are surprised to learn that without the right planning, their practice can lose value quickly. Staff may leave. Patients may drift to other providers. Bills and loan payments continue. And your family may be left without income during a critical time.
The good news? We've been doing this a while. We've seen the good, the bad, and the ugly, so we know that proactivity is key (and helps you sleep better at night.)
Let’s break down how you can be proactive.
Buy‑Sell Agreements (An Absolute Lifeline for Practice Owners)
A buy‑sell agreement is essentially a written plan outlining what happens if an owner dies, becomes disabled, or can no longer work. It’s just as important for solo dentists as it is for partners
- They prevent disputes among partners, spouses, or other family members
- They establish a clear valuation method (so no one overpays or gets shortchanged)
- They guarantee funding so the practice can continue operating or transition smoothly
- They protect your family financially if the practice must be sold
Without this agreement, your practice’s fate can be left to courts, insurance companies, or overwhelmed family members who may not know how to run a dental business.
Types of buy‑sell agreements for dentists:
- Cross‑purchase: Other owners buy your share
- Entity‑purchase: The practice itself buys the interest
- Wait‑and‑see: A flexible hybrid approach
If you’re in a multi‑doctor practice and don’t have a buy‑sell in place, or haven’t updated it in the last 3–5 years (we see this often), it’s time to take action. These agreements only work if they’re current and properly funded.
Disability Insurance: Protecting Your Most Valuable Asset, Your Ability to Earn
For most dentists, their income is the single largest financial asset they have, and most would prefer not to leave it vulnerable. Here are two types of disability insurance to consider:
A. Personal Disability Insurance
This is designed to replace a portion of your income if you can’t work. For dentists, an “own‑occupation” policy is essential, meaning you’re covered if you can’t perform dentistry, even if you could work in another field.
B. Business Overhead Expense (BOE) Disability Insurance
This policy keeps the practice alive while you recover.
It covers expenses such as:
- Rent
- Staff salaries
- Utilities
- Loan payments
- Insurance premiums
- Equipment leases
Without BOE coverage, practices can burn through cash very quickly during an owner’s absence. BOE insurance buys you time. Time to heal, time to decide on a transition, or time to implement your buy‑sell plan (not time to panic.)
Key Person Insurance: When the Practice Depends on You (or Another Vital Team Member)
If your practice would struggle financially without you, or without a lead associate, office manager, or hygienist, key person insurance becomes a powerful tool.
- Provides funds to stabilize the practice if a key employee becomes disabled or dies
- Covers the cost of finding, recruiting, and training a replacement
- Helps maintain cash flow and patient confidence
- Protects the practice’s valuation in the event of a sale
Most of the time when we work with dentists, they are the key person, but in multi‑provider practices, a top-producing associate may also qualify.
Putting It All Together: A Comprehensive Protection Strategy
Each practice can tend to have its own unique situation, however here’s what a complete plan for dental practice continuity can typically include:
✔ Up‑to‑date buy‑sell agreement (even for solo owners via a solo disability buy‑out)
✔ Adequate individual disability insurance with own‑occupation protection
✔ Business overhead expense insurance to keep the practice running
✔ Key person coverage for owners or critical team members
✔ Written emergency operations plan for the staff
✔ A backup clinical provider (associate, locum tenens, or partner plan)
✔ Clear instructions for family members on financial and legal steps
Even with all the clinical systems and review protocols dental practices maintain, this kind of business continuity plan is often missing, and it’s one of the most important. Discuss with an advisor about how these tools may pertain to your specific situation.
Your Practice Is Valuable. Protect It.
Your dental practice supports your family, your team, and your community. An unexpected inability to work doesn’t have to derail that.
By putting the right protections in place, you can help ensure that:
✔ Your income continues
✔ Your practice remains stable
✔ Your family is financially protected
✔ Your team keeps their jobs and patients keep receiving care
✔ Your practice’s value is preserved no matter what happens
If you'd like help reviewing your practice protection strategy, or building one from scratch, I’m here to help.
1 David U. Himmelstein, Robert M. Lawless, Deborah Thorne, Pamela Foohey, Steffie Woolhandler, “Medical Bankruptcy: Still Common Despite the Affordable Care Act,” American Journal of Public Health 109, no. 3 (March 1, 2019): pp. 431 – 433. See Table