editorial
What You See is not What You Get Dental practices’ most valuable asset remains uninsurable.
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insurance adequately covers the repair or replacet happens. Devastating events damage or ment of the tangible building structure, equipment destroy dental practice assets, both tangible and and supplies. intangible. Available insurances currently cover Recent COVID-related practice restriction cases only physical damage to tangible structures, equiphighlight one key aspect of current inadequate covment and items you can see and touch, and limited erage for solely intangible asset damage. During the intangibles only when concurrent with such physiearly pandemic, dentists cal damage. This framework filed a torrent of business inleaves coverage gaps for The insurance industry terruption insurance claims intangible losses, such as for the intangibles, lost busilost income unrelated to must reassess its role in ness income and extra exphysical damage and, more compensating dentists penses. Dentists argued that importantly, for damage to mandated COVID practice a practice’s most valuable for intangible asset losses. restrictions or closures of asset, intangible goodwill. their premises, in whole or In order to protect denin part, constituted direct physical loss under their tists’ risk and return on their financial investment policies in order to trigger intangible coverage. The in their practices, insurers need to develop intaninsurers typically denied these claims, countering gible business interruption insurance that compenthat the policy language specifically required a trigger sates dentists for loss of not only what you see but, of “physical loss or damage” or permanent alteration also, all the intangible losses dental practices incur to the premises in order to engage coverage. These in devastating events. denials led to extensive litigation and the first case to make its way to a U.S. Court of Appeals, which Devastating Events and Current Coverages ruled in favor of the insurer.[1] The court concluded The events that damage practice assets vary from natural disasters and cyberattacks to, most recently, that the business interruption policy never intended, COVID-related government-mandated restrictions. and the insured did not purchase, coverage unrelated We can classify these events into three categories to actual physical loss.[2] This result signals the need with respect to the type of damage incurred: solefor insurance carriers to develop a coverage for solely ly physical damage; solely intangible damage; and intangible losses that insurers can successfully fund physical damage with intangible asset losses, inand dentists can afford. cluding practice goodwill. Hurricanes, floods, fires and some cyberattacks In the event of solely physical damage, with no cause easily proven physical damage, with associatconcurrent intangible loss, commercial property ed intangible loss. Commercial property insurance
2 AUGUST/SEPTEMBER 2021 The New York State Dental Journal ●
