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DSO insurance starts with the corporate structure

Many states restrict who may own a dental practice or make clinical decisions, rules often grouped under the name "corporate practice of dentistry". So a typical dental support organization pairs two kinds of company. A management company (the DSO or MSO, sometimes investor-backed) runs the business side. One or more dentist-owned professional entities (PCs or PLLCs) employ the dentists and treat patients.

A management services agreement connects them. The management company supplies the non-clinical work, such as leases, equipment, staff support, billing, IT and marketing, for a fee. Structures vary by state and by deal, and your healthcare attorney sets them up. Our job is to make sure the insurance follows whatever structure you have.

To an underwriter, a dental group is a schedule of locations, a combined payroll, a shared data system, a pace of acquisitions and a claims history spread across many dentists. Groups past the size where a business owner's policy fits usually move to a commercial package with separate property and liability parts.

How claims tend to happen across many offices

Clinical claims stay clinical. A treatment claim at one office lands on the treating dentist and the professional entity. The management company's general liability policy usually excludes professional services.
Data is shared, so breaches are too. The management company usually runs the practice-management system and holds the records for every office. One compromised account can reach patients at all of them.
Employment claims scale. More managers, more locations and more states mean more ways for a firing or a schedule dispute to become a claim.
Money moves through many front desks. Each office takes co-pays, posts payments and makes deposits, often with less owner oversight than a single practice.
Acquisitions bring history. A newly acquired practice comes with its dentists' past treatment and, sometimes, gaps in their old coverage.

Example scenario: The cloud host that runs practice-management software for all nine of a group's offices goes down for four days after an attack on the vendor. None of the group's own computers were touched, but no office can see the schedule, post payments or send claims. Whether the group's cyber policy pays for that lost income depends on its dependent (or contingent) business interruption wording, which is worth reading before you need it.

Leadership team of a multi-location dental group meeting

What sits where: the coverage stack for a dental group

Coverage usually splits along the same line as the structure. The clinical side insures the care; the management side insures the business.

Malpractice for each professional entity

Entity coverage for every PC or PLLC, a policy for each dentist and license defense for each license. Dentist malpractice insurance

Property across every location

Chairs, imaging, build-outs and the equipment the management company leases to the practices, valued office by office. Property and equipment insurance

Cyber at the management company

The company that holds the data and runs the shared systems usually carries the cyber policy, with every office in scope. Cyber insurance

Workers' comp in every state

Each state's rules apply to the team working there, and payroll is tracked by location. Workers' comp for dental teams

Employment practices liability

Claims from employees across offices and states, plus claims from patients who say a team member harassed or discriminated against them. Employment practices liability

Crime

Employee theft, forged checks and funds-transfer fraud across many deposit points and one central accounts-payable team. Employee theft coverage

Umbrella over the business lines

Extra limits above general liability, auto and employer's liability. Directors and officers coverage for the management company's board and investors sits beside it. Umbrella insurance

Where dental group programs come apart

New offices mid-term

Groups rarely add offices on the renewal date. Many property and liability policies include a newly acquired location provision that can extend some coverage to a new office for a limited time, but it's temporary, it may carry lower limits and the office still has to be reported and added. Tell us before closing, not after.

The clinical side needs its own plan. If the selling dentists had claims-made policies, a tail or prior acts coverage should be settled before closing, and buyers commonly make it a closing condition.

Example scenario: A group closes on its seventh office in mid-March. The selling dentist retires and lets her claims-made policy lapse without buying a tail. Eight months later, a patient she treated sues her and the professional entity the group now operates. Because the entity was bought rather than its assets, its past liabilities came with it. A tail or prior acts coverage set up at closing would have given that claim a home.

What lenders, investors, landlords and affiliated dentists ask

A dental group answers to more parties than any single practice. Typical requests include:

Lenders and investors. Loss runs, limits by line, crime coverage and directors and officers coverage, plus certificates for each location.
Landlords. A separate lease for each office, each with its own insurance article: general liability limits, additional insured status, a waiver of subrogation and sometimes an umbrella.
Affiliated dentists. Minimum malpractice limits, a clear answer on entity coverage and who pays the tail when a dentist leaves.
States. Rules differ by state and can't be smoothed into one policy. Ohio offices must get workers' comp from the state fund, with stop-gap employer's liability bought privately Ohio's workers' comp rules, while Texas lets private employers opt out of comp entirely, with real trade-offs if an employee sues Texas workers' comp choices. Malpractice law changes at every state line too: caps, filing deadlines and pre-suit rules. Malpractice laws by state

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Growing a dental group

The program should be built for the group you'll be in two years, not just the one you are today.

One schedule, one renewal. Put every office on one program with consistent limits and a single renewal date, so a new location isn't insured on different terms than the others.
Cyber that scales. As the number of patients in your shared system grows, so does the cost of notifying them. Under the HIPAA Breach Notification Rule, a breach affecting more than 500 residents of a state also requires notice to prominent media outlets there, and a breach of 500 or more people goes to HHS at the same time as the patient letters.
Adding specialties. In-house oral surgery, periodontics or orthodontics changes the malpractice rating for those entities and dentists.
Moving into new states. Each new state brings its own comp rules, malpractice law and licensing questions. Our team is licensed in 28 states, so ask early if an acquisition target is outside them.

Our licensed team starts with your structure chart and your management services agreement, then builds the schedule office by office.

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Questions dental groups and DSOs ask

Does a DSO's insurance cover the dentists' malpractice?

Usually not. In a typical structure, malpractice sits with the dentist-owned professional entities and the dentists themselves, while the management company insures the business side. Check that each entity is insured on the right policy.

Can all of our locations be on one insurance program?

Usually, yes, within the limits of each carrier's appetite and each state's rules. One program with one renewal date keeps limits consistent and makes adding offices simpler.

Does our umbrella raise our malpractice limits?

Generally no. Standard commercial umbrellas exclude professional services, including dental treatment. Higher malpractice limits come from the malpractice policy or a professional liability excess policy.

What happens to coverage when we acquire a practice?

The new office needs to be added to the property and liability schedule, ideally effective at closing. On the clinical side, settle the seller's tail or prior acts coverage before closing, especially if you're buying the entity rather than its assets.

Does the management company need directors and officers insurance?

Many do, especially with outside investors or a board. D&O responds to claims about management decisions, which malpractice and general liability don't cover.

Insurance for dental groups and DSOs