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Protect Your Dental Practice Against Partner Disability
18 March, 2022

How To Protect Your Dental Practice If A Partner Become Disabled

Disability is a reality for many people in the United States. According to the Social Security Administration, one in four people will become disabled at some point before they reach retirement age. For dental practices, this can be a difficult issue to navigate. What happens if one of your partners becomes disabled? How do you protect yourself and your employees? In this blog post, We will discuss the business side of disability for dental practices. We will provide tips on how to protect yourself and your employees should a partner become disabled. We will also discuss the importance of disability insurance for dental practices.

While no one likes to think about the possibility of becoming disabled, it is important to be prepared. For dental practices, this means having a plan in place should one of your partners become disabled. If you are the owner of the practice, you will need to protect yourself financially.

Establishing A Plan

Disability insurance is an important part of any business. For dental practices, it can be especially important. By having a disability buy-out agreement in place, you can rest assured knowing that your business will continue to run smoothly should something happen to one of your partners.

A disability buy-out agreement is a contract between business partners that outlines what will happen if one of the partners becomes disabled. The agreement should specify how the disabled partner will be bought out, and how the business will continue to run.

One of the most important aspects to consider when setting up a buy-out agreement is ensuring that it includes an accurate and fair valuation formula. A business’ value can never be arbitrary; rather, there needs some type or method put into place for this purpose. You will want to have clarity on what the business is worth on paper.

Disability Insurance

In addition to having a disability buy-out agreement in place, it is also important to have disability insurance. Disability insurance can help to cover the costs of buying out a partner, as well as the lost income from a disabled partner. We wrote an article on what to look for in disability insurance. You can check it out here:

What To Look For In An Insurance Buy-Out Policy

You will also want to look for a policy that is flexible enough to be owned by the business, a trust, or the partners themselves.

Another important thing to look for is funding options. The policy should have a variety of funding options available so that you can choose the one that best suits your needs.

You will also want to look for a policy that has an occupational rehabilitation and modification benefit. This will help owners return to their business if they become disabled.

Finally, you will want to look for a policy that has a transfer of coverage option. This will help to preserve medical insurability in the event an owner leaves one business to join another.

When looking for an insurance buy-out policy, it is important to find one that meets your needs. By doing your research and knowing what to look for, you can be sure to find a policy that is right for you.


Insurance carriers generally require a buy-sell agreement to be in place for them to provide coverage. The underwriting carriers will also want to see at least one to two years of income statements. Most dental practices are vastly under-protected.

Protecting Your Team

In addition to protecting yourself, it is important to protect your team. If one of your partners becomes disabled, you will want to make sure that your employees can continue to work.

Disability insurance can help to cover the costs of lost income if a team member becomes disabled themselves. It can also help to pay for medical expenses and rehabilitation costs. By having a disability insurance policy in place, you can rest assured knowing that your team is protected.

Most dental practices are under-protected. Many do not have a buy-sell agreement in place, and even fewer have the proper insurance in place. This can leave the practice vulnerable should something happen to one of the partners.

By taking the time to establish a plan, and to get the proper insurance in place, you can protect your dental practice. Doing so will help to ensure that the practice can continue to run smoothly, even if one of the partners becomes disabled.

Next Steps

Now that you know the importance of having a disability buy-sell agreement and the right insurance in place, you may be wondering what the next steps are. If you don’t have a buy-sell agreement in place, now is the time to create one. You will want to work with an attorney to ensure that the agreement is fair and accurate. We have relationships with great lawyers focused on the dental space. Reach out to us if you need a recommendation.

You will also want to review your buy-out insurance policy and make sure that it meets your needs. By doing so, you can be sure that your practice is protected in the event of an unexpected disability.

About DrillDown Solution

DrillDown Solution a wide range of dental CPA services to take the burden off your shoulders. We’ll help you save time and get a clear picture of your company’s financial standing so you can focus on what you’re good at – dentistry!

You deserve to have a proactive team of dental CPAs and accountants working for you. Let us take the stress out of dealing with your finances so you can focus on what you’re good at – dentistry!

Note: The material and contents provided in this article are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.