One important part of pursuing your future goals as a dentist is procuring appropriate insurance protection for yourself and your practice. Both workers’ compensation and disability income protection can serve important roles in protecting your practice.
Learn more about the details and differences of these insurance products and how they may benefit you.
Workers Compensation vs. Disability Income Protection
As a dentist with employees, disability income insurance is designed to supplement your personal income when you can’t work due to illness or injury. Workers’ compensation serves a similar purpose, but for your employees (and possibly yourself) and only if the illness or injury is in relation to their work for your practice.
The Differences between Disability Income Insurance & Workers’ Comp
Workers’ comp and disability income insurance both may help protect either you or your employees against lost income and may cover the expenses of work-related injuries.
Workers’ comp may cover an employee’s medical expenses from a work-related on-the-job injury or illness. It is designed to cover expenses associated with an accident or incident that happened on the job, which may include lost income.
Conversely, disability income insurance provide coverage for injuries or illnesses that prevent you, as the insured, from working, even if they didn’t happen at work. Disability income insurance is intended to replace a portion of your regular income to help you maintain quality of life while you’re out of work because of injury or illness.
In addition, employees obtain workers’ comp coverage through their employer while disability income insurance is often purchased directly from an insurance provider.
What Is Workers’ Compensation?
Workers’ compensation, which is also called workers’ comp, is a type of coverage that is offered by employers to cover employees.
Generally, workers’ compensation can:
- Replace at least a portion of an employee’s lost wages. Wages that they were unable to make because of the incident.
- Cover medical expenses related to the work-related injury or illness.
- In some cases, workers’ comp will even cover retraining costs. This most often occurs when the injury or illness has made it impossible for the employee to return to their previous job.
- Pay beneficiaries if an employee is killed on the job.
Workers’ comp does not require any buy-in on the part of an employee in order to take effect. Businesses may be required by law to offer workers’ compensation depending on a number of factors, though it’s important to note that some may be exempt depending on the state in which you work.
What Is Disability Income Insurance?
Disability income insurance, which may also be considered income protection, may replace part of your income if you are injured or become ill. This illness or injury doesn’t have to be tied to your job, although it can be work-related.
Disability income insurance may provide coverage for injuries and illnesses that prevent you from working and is intended to replace at least a portion of your income. Disability income insurance policies may provide coverage whether you were harmed on the job or in your daily life.
Some employers offer a short-term disability insurance policy to their employees, and some offer both short and long-term disability.
Here are some differences between these options:
- Short-Term Disability: This coverage may supplement a percentage of your base salary while you’re unable to work. Short term disability benefits are of limited duration, typically between 3 - 6 months.
- Long-Term Disability: Long term disability also may replace a portion of your salary due to disability. Benefits typically take a longer time period to "kick-in" but may be payable for a longer duration than short term disability benefits. Benefits may be paid until age 65, 67, or 70.
Who Needs to Worry About Workers’ Comp?
Depending on the state, a business with employees may be required to offer workers’ compensation that protects their employees in the event they are injured or become ill from a work-related incident.
However, business owners themselves are not necessarily required to include themselves in this coverage. The legal requirements vary based on a variety of factors. Of course, a dental practice should review workers' compensation and Occupational Safety and Health Administration (OSHA) requirements with a legal professional.
Who Needs to Worry about Disability Income Insurance?
While there may not be a legal requirement stating that dentists must purchase individual disability income insurance for themselves, it is an important risk management tool that can supplement lost income in the event of an injury or an illness. The long-term financial impacts of a dentist becoming disabled may be catastrophic. Disability insurance helps manage this risk.
Some states may require that employees be provided short-term disability insurance sometimes called state disability insurance, in addition to workers compensation. Check with your state and review with a legal professional for specific details. Oftentimes, there is no requirement that dentists offer long term disability insurance to their staff, some dentists may consider it for the staff as an employee benefit.
Where to Start with Disability Income Insurance
Treloar & Heisel has worked with dentists on many different kinds of insurance coverage, including disability income insurance.
It’s a common coverage for dentists to request because it’s often affordable and offers a wide range of protections in case of injury or illness.
With disability income insurance, it may be a relief knowing that you’re protected in the event you’re unable to work someday due to a disability covered by the policy.
To learn more, read our guide concerning disability income insurance for dentists.
Treloar & Heisel and Treloar & Heisel Property and Casualty are divisions of Treloar & Heisel, Inc.
Insurance products are offered through Treloar & Heisel, Inc.
This information is intended for general informational purposes only and is not intended as advice. Please review your insurance policy contract for the binding terms and definitions.
Treloar & Heisel, Inc. and its divisions do not offer legal advice. Please consult a legal professional concerning this topic.