High Costs and Nature’s Fury: The Dual Threat to Dental Practices Today

Two of the biggest global stories of 2023 have been inflation and extreme weather. On their own, each has the potential to negatively impact your practice, and together they can pose serious risks to the financial health of your business. While these issues are bigger than any individual dental practice, there are things practice owners can do to reduce the risk of a financial catastrophe caused by them.

The Double Whammy of Inflation and Weather

It’s no secret that global prices for almost everything rose sharply during the pandemic. For dental professional equipment and supplies, prices have risen nearly 20% in the United States since March 20201 and it’s a very similar story in Canada. On-going component shortages, supply chain woes, and extremely high demand have conspired to drive up prices for new equipment. While overall inflation has been creeping lower recently, costs for highly manufactured and specialized equipment remain stubbornly high.

Even with comprehensive business contents insurance – such as CDSPI’s TripleGuard™ Insurance which is designed exclusively for the needs of dentists – practice owners should account for the recent rise in prices for dental and office equipment when determining if their coverage limits are adequate.

At the same time, just switch on the news for a few seconds to see more frequent extreme weather events in places where these things were once rare. More intense and frequent storms mean that water damage claims are now more common and costly. According to a study from the University of Waterloo, flooding is “the most pervasive and costly” type of natural disaster in Canada, with growing impact on “financial and mental distress”2. It doesn’t take much. Just a few centimeters of water from a single burst pipe can severely damage equipment and offices.

The good news is that CDSPI and our partners are here to help.

Act Today to Help Ensure a Successful Tomorrow

Practice owners would benefit from reassessing their office contents insurance coverage on an annual basis or any time there have been improvements made to their practice. This will ensure they have adequate protection against the effects of inflation and extreme weather-related instances. Taking some simple steps today can go a long way to safeguarding their practices' future and their ability to provide exceptional care to their patients. Here is a simple four step plan to start taking action today:

  • 1

    Get new quotes from suppliers:

    Remember, it’s not the present value of your equipment that matters, but rather the cost to replace it. Start by asking supply company reps to provide up-to-date quotes for equipment. Warning: this may lead to sticker shock.

  • 2

    Review policies for coverage gaps:

    Carefully examine your existing insurance policy to determine if the coverage amounts align with the current value of your practice’s contents. Factor in the costs for any improvements or expansions made that have increased the practice’s value.

  • 2

    Evaluate additional coverage options:

    Contact CDSPI to discuss any necessary coverage updates to your TripleGuard Insurance policy. We can help you increase your coverage to account for higher equipment and office contents costs.

Implications for Building Owners

For dentists who are also building owners, the impacts of inflation and weather are even more dire. In addition to rising equipment costs, building owners must consider the costs for repairing, remediating, or even rebuilding their property after a claim. Those costs have similarly soared recently. Statistics Canada found that non-residential construction costs rose by 12.5% in 2022 compared with 2021, the highest annual increase since they started tracking this data in 1981!3

While you can’t control the weather or have much influence on inflation, a building owner can take action to reduce the impact on your property. When it comes to water damage specifically, our partner Zurich Insurance has published a wealth of helpful resources including a dedicated Flood Resource Hub for businesses. Remember, the best insurance claim is one you never have to make.

1 FRED: https://fred.stlouisfed.org/series/PCU3391143391141

2 Natalia Moudrak and Dr. Blair Feltmate: Ahead of the Storm: Developing Flood-Resilience Guidance for Canada’s Commercial Real Estate. University of Waterloo, October 2019. p10.

3 Statistics Canada: https://www150.statcan.gc.ca/n1/daily-quotidien/230208/t001d-eng.htm

TripleGuard™ Insurance is underwritten by Zurich Insurance Company Ltd. (Canadian Branch).