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This podcast covers from START to FINISH How to Acquire a Dental Practice. Michael Dinsio, founder of Next Level Consultants has literally seen hundreds of deals as a banker in the industry & he has personally consulted hundreds of dentists as a Buyers Representative. Michael talks with GUEST SPEAKERS about Due Diligence, Legal, Demographics, and more... He invites experts to the show to help you avoid those headaches and heartbreaks. So start at the TOP w/ Episode 01 and work your way through the transition process. We break it down step by step in a true #UNSCRIPTED and genuine way.
Oh, yeah.
Here we go.
Practice acquisition.
There are pitfalls
throughout the entire process.
If you want to buy a practice, this is how,
folks.
acquisition unscripted the
truth when buying and
selling a dental practice
and now your host Michael
Dinsio what up what up guys
hey welcome back welcome
back to another episode of
dental acquisition
unscripted you guys know me
mike densio with next level consultants
Guys, I have to apologize.
I've been really,
really lazy and I have not
published enough episodes.
My team and I are working on it.
I'm a busy guy,
but I really love this stuff.
I love
talking to you through this
microphone and giving you
great information this is
not a way for me to make
money this is a way for me
to educate you guys all
about the process of buying
a practice and I just want
to give a little gratitude on
you all and listening um I
get on phone calls all day
like mike we really love
the program and so thank
you so much we have fun
with it um our commitment
in uh the next 12 to 15 20
months is we're going to
have more consistency in
the program and um and uh
we're excited about all the
new episodes coming out I
have another episode
another not episode but
another announcement so
you all know that we have
two programs going on we've
got one that's really
focused on startups so it's
startup unscripted it's the
red brand it's that logo
that you you probably know
on the startup side this is
the blue brand this is
acquisition unscripted so
two different kind of
programs that have content
specifically to what you're
trying to do startup
acquisition a lot of you
don't know what you want to
do so it's good to toggle back and forth
But we're about to solve that problem.
And also,
we're going to add some more
content that's outside of
startup and acquisition.
And so we are going to go
through a rebrand and just
simply call ourselves Dental Unscripted.
If you actually go on the website,
Dental Unscripted, that's our website.
And you're just going to see
the startup and acquisition
side when you go to dentalunscripted.com.
But soon we will be mixing
in more content that's more
about practice management.
So it's going to be all under one house.
So if you are following this program,
Dental Acquisition Unscripted,
you're going to just pay
attention and jump on and
subscribe to what's soon to
be Dental Unscripted podcast.
Simply Dental Unscripted.
So...
Okay, without further ado,
this episode is a good one.
We are going to be talking
all things insurance and
liability insurance.
Yay, super fun concept and topic.
But look, this is really important.
You're about to get into business.
I have insurance.
I think I have $2 million or more.
I have some on personal.
I have some on business.
It's really important.
There are crazy people out
there that want to sue you.
There's also disability and
just things that you need
to really protect yourself.
And there's nothing worse
than getting into a
situation and your business
and your livelihood gets shut down.
And that's a real, real thing.
So we're going to go through
all things insurance.
I've got a friend of mine
that has been helping a lot
of our clients on the program today.
His name's Brian Martinka,
and he represents and is a
partner at Westpac Wealth
Partners based out of Arizona.
Brian, welcome to the show, buddy.
Thank you for having me, Michael.
Yeah, man.
Yeah, this is good.
This is good.
So as always, folks,
it's very unscripted and we
have not planned this conversation,
but we do have some topics that
I think you're gonna really
wanna hang on to.
We're gonna talk about why
insurance in general,
like why do we even need it?
A minimalistic insurance strategy,
because sometimes cashflow is a problem.
So Brian's gonna break that down.
And then like fully covered, like, hey,
no one's gonna get me, I'm covered.
We're gonna go through a
fully covered strategy.
And then we're going to get
into some pitfalls.
So got some good topics that
you're going to want to hang in for.
But without further ado, Brian,
give us a 30 second minute elevator,
kind of what you guys are
all about at Westpac Wealth Partners,
buddy.
Take it away.
Yeah.
So again, thank you for having me,
Michael.
So I've been in the business
for about a decade now,
working specifically with dentists.
On the team, I handle all the insurance.
We have a couple of guys who
do the financial planning.
But really what we do is we
help people make better
financial decisions,
whether it's financial planning,
tax planning, estate planning.
Okay.
Awesome.
And then on the insurance side, you cover,
you pretty much help folks
that need pretty much any
kind of insurance need that
if it's insurance, you're the guy.
Correct.
Awesome.
Awesome.
Well, welcome to the program, man.
I, I, I, again,
I really appreciate what you
do for our clients.
And we've wanted to get you
on the show for a while.
So thanks for making time.
Real quick,
is there anything that you
could throw out that makes
Westpac a little different
than the rest out there?
I would say, yeah,
it's our planning process.
It's very comprehensive.
Once clients get dialed in,
other than the insurance
and financial planning,
it's really focusing on the
business planning.
A lot of the key areas that
we focus on are the tax and
state planning side.
Okay.
Okay.
I think that's great.
I can tell you right now as
a business owner,
I'm always looking for help
with people that are way
smarter than me in areas,
estate planning and tax being.
a really important thing.
And,
and as dentists get into ownership and
start building wealth,
it just gets more and more
and more complicated.
And I personally have experienced that.
And you can only know so much, right?
Um,
you can only read so many articles and
listen to so many podcasts
to where you can only get
so far in some of these categories.
And it's really good to have, um,
a group of individuals that you trust and,
um,
And that's awesome.
So, buddy,
thanks so much for being on the program.
Absolutely.
Let's get into some meat,
some meat and potatoes,
which is the Mike D'Incio
unscripted style.
So let's just throw a
softball at you this real quick.
Why do you even need a business insurance?
It's kind of a stupid question.
Let's peel back some onion layers on this.
So why do you need business insurance?
Well, one,
the banks are going to require it.
For the business,
if you are doing a startup
or have a business in general,
it's also important to
protect your business.
You know, if something goes wrong,
as you mentioned,
you want to make sure that
all areas are covered.
You have people trying to sue you.
You can become sick or
something goes wrong.
You just want to be overall protected.
Yeah.
Give us some scenarios, man.
Give me a story.
Give me a story where you
got a call and someone was
totally screwed because
they weren't insured.
And look, this isn't to scare the audience,
but guys...
Actually, Brian,
don't give us like a 1% situation.
Give me like the most common, oh shit,
like they didn't cover
themselves and we had this
conversation and they
didn't choose that insurance.
Like what's the most common one?
Go for that.
The most common that we see
with dentists early on is
actually disability insurance claims.
And those happen a lot.
OK,
so we've I've had clients who have
neuropathy, who have had MS.
I had a client, you know,
a few years back who had a
benign brain tumor and that
caused a number of complications.
And that's that's definitely
going to affect revenue business.
And that's when you probably
are getting ready to sell your business.
Yeah.
Yeah.
So so disability dentists
get disabled all the time
that that's right.
Yeah, it's, uh, any,
anybody under the age of 35,
it's a one in four over the age of 35.
It's a one in three.
Whoa.
We actually have someone on
the Next Level team that's a dentist.
And his hand is not up to par.
He can't do extractions.
And so here he is.
He's now a consultant with Next Level.
And that's a very common story.
But also just living, snowboarding,
skiing.
It's that kind of stuff too, right?
Yeah.
Oh, yeah.
I mean,
I recently had a doctor client the
other day get into an
accident and reach out to
me and he's going to be out for a while.
And we don't do auto insurance.
But, you know, the first thing I asked him,
one, was it your fault?
And then number two, what are your limits,
you know, that you have?
Because a lot of the at
least out here in Arizona,
the state minimums for auto
insurance is twenty five thousand.
And so, I mean,
he's driving one hundred
fifty thousand dollar car.
He's a doctor.
So, yeah.
you hit somebody at a pretty
reasonable speed.
I mean, you go over that limit.
Now they're going after
assets and income and everything else.
Is that, is that what happens, Brian?
Let's dig into the little bit.
Like what, what's the kind of the,
when something does happen?
Because things happen.
Malpractice, whatever, whatever.
It's gonna happen.
You guys, dentists on the horn here,
I mean,
you're seeing hundreds of patients a year
in some cases, half a year, big practices,
right?
So sometimes monthly, right?
Something's gonna happen.
So what's the process when
something does happen?
Like a patient,
we're kind of pivoting away
from the most common disability,
but like when something
does happen like that, what's the pro,
how do the attorneys handle that?
Yeah.
Yeah, I mean,
that's that's so that's a
different side of the insurance.
I mean, you know,
if they have a complaint or
some procedure goes wrong.
Yeah,
there's definitely due diligence part
that that goes into that
they're they're looking into.
And usually it doesn't go over the limits,
which is nice.
I mean,
they pretty have high coverage as it is.
Um, starting out and then again,
it's required for many different reasons,
but when you start getting
into some specialty groups, you know,
like guys are doing implants and stuff,
that's where we kind of see a lot of, um,
things go wrong.
But the process, so the,
so the attorneys start with what,
what they sue the entity.
They sit like,
walk me through the process
of someone trying to get you.
Cause, cause the top,
the question is why do you
need insurance and how do
you layer those insurances?
So,
so kind of walk us through like the
process in which someone is
trying to sue you and why
and where the insurance
kicks in and all that.
So I knock on wood.
I haven't had any of those
claims come through.
right um and we insure uh
600 dentists or I do at
least and on my team wow so
no one slipped on the ice
and went after a dentist
and on that it's just a
matter of time right it's a
numbers game um but I've
had people in my firm who
also work with dentists
that are team members of
mine and I i can tell yeah
the attorneys are coming
after everything there's
there's a claim that's filed um
you know, so it's, it's,
it's a little scary,
but majority of the time, I mean,
the dentists are usually
covered for the most part.
Okay.
Um, okay.
So that's the scary part,
the disability part.
What about, uh, content and, and,
and why do you, why would you need to, uh,
ensure your, your stuff?
Uh, I'm sure that happens quite often.
Yeah.
We actually just had, uh, uh,
a claim with a practice
owner where the equipment
wasn't working and the
insurance is going to cover
it and it was under warranty, thank gosh,
or excuse me,
the insurance didn't have to cover it,
it was under warranty.
So where equipment does go bad, but if it,
you know, in the sense of,
I guess a fire or whatever, I mean,
you're
your equipment is covered.
So floods, I mean,
I've heard of floods lots of times.
Yeah.
Pipes break above you and it flows.
So, um, uh, on those policies, um, Brian,
do you try to get full replacement new?
Like how's that work?
Yeah, we do.
And,
and we actually have another team that
facilitates that or that insurance.
And we're, we're jumping on the calls.
We're making sure that the, um,
the equipment that they have, you know,
they're obviously,
we want to know what it's worth and yeah,
getting it fully insured
for that purpose.
Okay.
Okay.
Perfect.
Well, let's pivot, man.
I really want to understand
sometimes I get my clients
that have a really low
cashflow situation where
we're buying a practice and
it's just not throwing off enough cash.
and or or or the banks um
some banks require less
than others so for for sure
some banks want the
cadillac uh all systems go
and then other banks just
want life you know or
whatever so I i guess I i
I'm sitting back and I'm
wondering like how do I advise my clients
in the minimal that they
need but forget what the
banks require not require I
that's not what I'm asking
a lot of people go down the
path of oh well the bank's
only making me get life so
that's all I'm gonna do and
I'm like whoa whoa whoa
like just because they're
they're they're only
requiring what they need to
cover their ass
you need to get some stuff
that covers your ass.
Right.
And so that's,
that's the conversation I
want to have is like,
what is the minimal that
you would feel comfortable
letting someone leave your
quote unquote doors and get coverage?
And then we're going to cover like what,
what the,
what else should you add to that
to make sure you're fully covered?
So first things first,
minimalistic insurance strategy.
How would you answer that?
Yeah, I mean,
just from a minimal standpoint,
cash flow is tight.
At least on the BOE side,
you want to at least cover
the loan for at least 12 months overhead.
Would you say BOE?
Business overhead expense.
Okay.
So what's that mean?
Yeah.
I mean,
there's different types of BOE policies.
One's going to cover the loan.
The other can cover rent.
It can cover staff, keep the lights on.
If you do have a disability,
that way when you're trying
to maybe exit at that point in time,
depending on the type of disability,
we can cover
everybody while you're out.
So.
Okay.
So business overhead, um,
business overhead,
I hear that quite often.
So, um, like it, it, it, it,
it covers what the name
suggests your overhead.
So how does,
how do you guys go about
underwriting business overhead insurance?
So you look at the profit and loss, like,
how do you do that?
yeah so we have to there's a
number of different things
that for the loan side I
have to have the banks send
me um what the loan
payment's going to be the
duration of that loan
payment and then if uh the
clients want to cover the
practice we need to know
the rent we need to know
the salary so they have to
send in all that
documentation to us um for
us to ensure it
okay so you're buying a
practice it's doing I don't
know 600 000 in collections
the overhead um let's just
say that it's it's uh the
overhead of the practice is
is somewhere around I don't
know 60 percent so um which
would be low by the way but
let's say it's 360 a year
right so so your your
coverage on business
overhead insurance on the overhead only
would be $360,000 for all 12 months plus,
plus the bank loan.
So let's just call the bank loan another,
I don't know.
Yeah.
So yeah, 80,000 a year,
but so that's for the annual.
So 440 a year,
but so you divide that by 12.
So essentially you'd be
covering 36,000 a month.
Is that right?
Correct.
Yeah.
So,
and that's assuming that something
happens that disrupts the business.
What are some of those examples?
and that's a disability policy again.
So, so my hand gets hurt, but what,
what about a tornado comes through?
What about, um, that's different.
So this is strictly for, for disability,
uh, the business overhead expense.
Okay.
Okay.
So, so I guess that kind of, um,
bleeds into what are the
other insurances other than
business overhead?
Then there's the, the life insurance.
Um,
know and that again one will
cover your loan and then I
always recommend that
people have uh additional
coverage for themselves to
cover their butt and their
families and etc so which
not all people do um which
is amazing can you explain
that like I feel like
clients don't quite connect
there so the bank requires
life why why do they
require life and what did
you mean by what you just
said because I know what you mean
Yeah.
So whenever you're purchasing a practice,
what's it's called a
million dollar practice, right?
The loan's a million dollars
and the banks want to have
coverage up to that amount.
So in the event you pass away,
the banks are covered, you know,
so they can pay off the
loan and they usually
collateralize those policies.
So it's assigned to the bank essentially.
But I always recommend that
clients get more coverage
if they don't have any, you know,
outside of the business.
So personal life insurance.
Personal life insurance.
Yep.
And when we look at personal,
we're looking for income replacement,
you know,
and that's the important
discussion to have with clients.
You know,
there's many different theories
of how much you should have.
But I'm always looking at
income replacement for
everybody on the life insurance side.
All right.
So so doctor buys a business.
Something crazy happens.
They pass away.
The family then inherits a
quite a stressful situation.
Call call next level.
If that happens,
we can walk you through that.
But essentially,
you've got to sell the business.
You're your spouse or
partner or family partner.
has to sell the business.
And if you sell the business,
which by the way,
just help someone here in Washington,
they passed away,
one of our past clients passed away.
And my client was their
family because everything
rolled up to their family.
And so it became a very
interesting situation where
I was helping the family
sell this asset for as much as possible.
But but it's a it's a fire sale.
The dentist is gone.
They've passed away every single day.
The schedule's collapsed and closed,
and we're telling patients
that something horrible has happened,
right?
And so the equity in the
practice has gone down.
So what we're talking about here is
The bank is covered.
They don't care if you're
going to your family is
going to sell this business
for a shortfall of maybe
500 grand of what it was
worth when you passed away.
Right.
And so so whatever it does sell out,
there's usually a shortfall
of the loans covered in
that in that life policy.
But what Brian's talking
about is what about your family?
What about that asset that
the family's losing?
Right.
So anything to add to that, Brian?
I'm sure you've dealt with this.
Yeah.
You know, and I always recommend,
like I said, I mean,
when we're looking at life insurance,
it's not usually just, hey,
how do we pay off debt, right?
Whether it's a mortgage and
anything else outstanding,
it's how do we replace
income for the family members?
Because what we find
typically is a lot of the
time that their spouse won't work.
Or if they do,
it's very minimal because
they're taking care of
family members and et cetera.
So one way we like to view
life insurance is...
And going back to the income replacement,
if you were to put a
million dollars into an
account and use safe withdrawal rate,
let's call it 4%,
every million dollars is
$40,000 of income.
So when we're looking at insurance,
how much income would your
family need to be able to
survive and continue to move on?
Yeah.
Yeah, that's a big deal.
I mean,
I think these types of
conversations need to be
discussed because terrible
things happen every single day.
Okay.
So life, business overhead, minimalistic,
anything else that you
would add to those two?
You know, I mean,
you're going to have your
malpractice insurance and
that's going to have
coverage up to 3 million.
That's pretty minimal.
And then the general liability,
which is pretty
So why general liability?
Tell me more about that.
And again, the general liability is floods,
fires, tornadoes, things that go wrong,
and that will be covered
for your practice.
And is that general
liability on the business or personal?
Well,
it's going to be on the business side,
yeah.
And that can stem off into
different things like
workers' comp and many
other things as well.
So when landlords are asking
for insurance policies,
it's usually the general
liability one they're talking about.
Is that right?
Okay.
And then what's the
appropriate amount for a
small business that-
Usually we see about a million.
A million dollars.
Yeah.
And general liability,
does that cover people falling on ice?
That would be the workers' comp insurance,
yeah.
Workers' comps employees,
I'm talking about a patient,
just decides to sue you.
Oh, yeah.
The general liability, yes.
To answer your question, yes.
Yes.
Okay.
So to rewind again, we've got life.
We've got business overhead, um,
in case of a disability
covers all your overhead, um,
including your salary to yourself.
Oh, it just popped in my head.
Doctors sometimes don't take salaries.
They just take, um,
owner draws instead of
running themselves through salary.
Um,
does business overhead insurance cover
the draws or do you have to
have yourself in a salary?
So that,
that would be a personal
disability that they would have.
Okay.
So, so the draws or, or whatever's left,
even if they don't pay
themselves through payroll,
that would be covered, uh,
on an individual basis.
Yeah.
Yeah.
Yeah.
Okay.
Okay.
Cool.
Okay.
Sorry.
Had to ask that question.
No, you're good.
So life business overhead insurance,
malpractice, uh, a general umbrella, uh,
what, what did you call that?
Um,
They call them bot policies, but yeah,
general liability.
General liability.
And then workers comp.
Workers comp, yep.
Those are the five?
Mm-hmm.
Okay, minimalistic.
So at bare minimum,
we need to walk away with
those five things.
Correct.
Can you add anything else to it?
Like don't not get X or whatever.
I mean,
that really covers your whole basis.
Okay.
Then let's pivot.
What are some things that
you would layer into that
to make sure that we are
fully covered or things
that are extras or a good idea?
What other types of policies
are you thinking of there?
I mean, this will pivot back to the
I mean,
you can always get excessive coverage,
but this will even go back,
tie into your personal, right?
And this is outside an umbrella policy.
To cover your personal umbrella.
So if someone does decide to sue you,
you're protecting your personal assets?
Correct.
I mean,
look at every city where you fly to
and on all the billboards.
I mean,
you got accident attorneys and
attorneys advertising all the time.
And whenever they find out that, oh, look,
this doctor hit somebody.
or is liable for something, I mean,
it's never a fun experience.
So they're usually having
them subpoena all their
assets and what they have, income,
all that.
It actually happened to my dad,
who's a business owner himself.
So someone went after the
whole the whole thing.
So they tried.
Yeah.
So my dad had hip surgery
and was leaving Mayo Clinic.
His leg went numb on the
freeway and he hit somebody
in there because he has a
large SUV at fifty five miles per hour.
Yeah.
And then they hired an
attorney and tried to go
after everything.
But the first thing they
look at is the insurance, you know,
how much coverage you have and
He has an umbrella policy,
but they usually try not to
go over because then when
you try to go over,
there's a lot of different moving pieces.
It takes a longer time for
the attorneys to settle.
So usually they try to
settle with the insurance amount.
Which begs the question,
the more insurance I have,
the more they're going to sue me for.
Comments?
no yes I'm just asking like
oh yeah I mean you know
yeah they try to go for it
yeah if I if I pay for four
million dollars of coverage
and something happens
they're gonna sue me for
four million dollars if I
have one million dollar of
coverage they're gonna sue
me for one million yeah
should I get more insurance
I'd always think it's a
good idea um just because
if anything is over you
know yeah then they're
gonna go try to go after personal assets
Yeah.
Do you have those
conversations with folks?
Like, do I really need this much?
What are the... All the time, right?
And it comes down to one thing is cost,
right?
What are you willing to pay for?
And then some people just think, oh,
that's never going to happen to me.
And, you know,
something ends up happening.
Yeah.
Okay.
So another umbrella personally.
So we guys, we've had, we've had,
we've kind of bounced
around a little bit.
So there's business
insurance and there's personal insurance.
Brian,
have we focused mainly on personal
or like what,
what are considered personal business?
The ones we just talked about?
Yeah.
So, I mean, for, for personally, again,
you're as a dentist,
you're going to require to
have malpractice no matter
what that's going to be
required to you to practice as a dentist.
Personal malpractice.
Yeah.
And even on the business side,
they'll require that.
Life insurance is not always needed.
And that's personal.
Yeah.
Yep.
And even on the business side,
the banks don't always require it.
So they're like, hey,
we'll approve the loan
without the life insurance.
Cool.
All right.
Don't recommend it.
But yeah.
Yeah, guys.
Actually, while we're on that point,
something happens.
You die.
Your spouse now has to make
sure that they cover that bank loan.
God, and I just told you,
I dealt with this, a fire sale,
the value of the practice
was depleting every single
month we didn't have our
hygiene patients coming in.
So this is gonna be your spouse's problem.
And if you just buy the business today,
a million dollars, let's say, God,
it's a horrible thing to think about,
but you get hit by somebody
that loses feeling in their right leg,
like Brian's dad,
it's this unfortunate situation.
you you're gone.
Now your spouse has to
figure out how to get that
$1 million liability off of
his or her shoulders.
So just because the bank is
not requiring it again,
it's a perfect example of,
folks, you got to cover yourself.
So, okay.
So, so malpractice on the personal side,
life is on the personal side is,
is business overhead on the
business side or personal side?
That's, that's on the business side,
but sometimes in the event, like,
you know,
because we work with a lot of
people who are finishing school, you know,
we try to get them disability,
even though it's not always required, but,
uh,
Disability on the personal.
On the personal.
But sometimes we have to use
those policies on the
business side because let's
say later on down the road,
that person develops a health issue,
even though they're not on
disability claim.
And then the banks are like, hey,
we need a BOE policy,
business overhead expense.
Sometimes they don't qualify for it.
And so then we use their
personal or we try to go to
there is another there is a
carrier that will insure them,
but they're going to be
paying like five times the amount.
But guys,
I have to stop and make these
breaks and spell this out because, again,
the whole reason why we
work is to cover ourselves at home.
whether that's paying our
bills for our family or
investing or whatever.
It's about taking care of us.
So you've got a couple of
things going on here.
You've got like leveraging
the risk of someone coming
at you and bankrupting your business.
And then you got another
thing where we could lose
our income if this business
doesn't thrive.
And by the way, if you're disabled,
Uh, and you're an associate,
whether you own a business
or your associate, you're shut down.
So, um, so I guess the point is, is like,
you always have to think
just because the bank might
not require it or, or whatever,
or if the bank is using a
policy to fulfill their conditions,
like Brian just said, you, let's say you,
you couldn't qualify for
business overhead insurance and,
Right.
But you had a personal
disability insurance.
The bank can use that.
So if you get disabled, the bank's like,
Hey, I'm, I'm still getting paid.
I'm taking your disability payment.
You guys can figure out your situation.
We're covered.
Right, Brian.
So that's a problem.
So, um,
so anytime that you have to like
steal insurance from your
personal side to cover your business,
it could be a potential problem.
Yeah.
Yeah.
Yeah.
Yeah.
Okay.
So back to our little thing here.
So disability, I'm sorry,
business overhead, life, well,
life's personal.
It can be?
So you can get a life policy
under your business entity?
Well, I mean, for the loan, yes.
Okay.
Or let's say you have key employees or...
A lot of people are starting
to partner with other
dentists and let's say that
dentist pass away or becomes disabled.
So there's disability buyouts,
there's key man.
Because what value did that
other partner bring to your practice?
In fact,
one of the faculty members here in
Arizona who teaches over at
Midwestern is a disabled
dentist who had three other partners.
They didn't get disability
buyout on each other and
they had to go get a loan
from the bank and buy out his share.
Yeah, I can speak to that.
My partner at Next Level,
her and I have a key man
insurance policy.
Her and I are the yin and
yang of Next Level.
If something happens to me,
she needs to be covered.
If something happens to her, I'm screwed.
It needs to be covered.
So key man insurance, super important,
especially in partnerships.
I'm glad you brought that up, Brian.
All right.
The last kind of like
segment that I want to hit
here is pitfalls of getting insurance.
Walk me through kind of like
what are the challenges in your world?
Is it underwriting?
Is it how long things take for closing?
Like what are some of your pitfalls?
Yeah, it's a combination of things.
Underwriting is definitely a
big part of it.
And so when people are
ready to buy a practice or they say,
you know what, I want to buy a practice.
I would just recommend
applying for all this stuff right away.
Even if you don't have a
practice lined up just
because the underwriting
process does take time.
And usually that's
collecting medical records
from different physicians
that they've seen.
And those those practices
don't send the medical
records on time for the
insurance company to review.
So we have to constantly bug them.
to get those medical records
and for how the
underwriters review it so
if you're in the process or
you know you want to buy a
business at some point I
would say in the next three
to six months just apply
for it because once you're
approved um then it just
makes it easier for when
you do find the practice
and we can get things
rolling from there so
I've heard that certain
insurances take a lot longer.
Which ones are the ones that take longer?
Those are the disabilities
probably going to always take the longest,
the BOE, the business overhead expense.
Life insurance is typically quicker,
but again,
it also depends on someone's
medical records and health
issues and everything that they have.
other thing is I i always
try to ask questions up
front so when I'm working
with somebody do you have
any health issues are you
taking any certain
medications um do you you
know those types of
questions and sometimes
they're not always honest
and you know things pop up
in their medical records
and they're like oh
I totally forgot to mention that to you.
I'm like, well, that's kind of a big deal,
you know?
Yeah, that could delay things.
So I've ran into this though, Brian,
what's the solve here?
If someone comes to you too early,
which is always better to
come early so that you don't explode.
but they also don't want to
pay $300 a month until they,
before they even own.
So what's the solve?
We don't even have to bind
it at that point in time.
I just,
we just wait and sit on the approval.
Okay.
So like expirations and stuff.
Don't worry.
Don't worry about it.
They're usually good for six months.
Um,
And so that's why I say
three to six months,
like I just applied for a
BOE policy on somebody who
is in the process of
looking at different practices.
I just applied with the highest amount,
not saying we're taking the
highest amount.
Um, that way, if it does come higher, Hey,
we're covered.
If it comes lower than we
just reduce it as is.
And then awesome.
So, so there's a solution there.
There's, and then worst case scenario,
if you had to re-up, is it,
is it faster if you had to
like reapply or no?
Um, if we had to re-up it,
that's why I always apply
for the highest.
Um, because then if we do have to re-up,
then they're looking at
certain underwriting requirements.
Yeah.
Yeah.
So,
so it expires in six months and to like
reapply, would that be faster or slower?
Yeah.
I'd be faster probably.
Cause you got all the information.
Yeah.
They would have everything
and they would just ask, Hey,
has anything changed with
your health in the past
couple of months or whatever it may be?
Have you seen any doctors?
And if the answer is no, then Hey,
we're good to go.
If the answer is yes, then.
So there's no downsides,
no downsides of getting it going sooner.
No.
Yeah.
Okay.
Awesome.
Not at all.
And then sometimes the banks
on the other hand,
this is where I do run.
Damn bankers.
There's damn bankers.
I know.
It's usually, Hey,
I need this insurance within three weeks.
It's like... Well,
they're trying to close on the deal.
And so they're getting all
kinds of pressure from the
brokers and the buyers and
the sellers and all the people,
the attorneys.
And then it always comes down to like, oh,
we finally got the lease.
Let's close next week.
And you're like, dude,
they just applied last week.
So...
So I think that's the big thing,
and I appreciate that
pitfall because that is, I always say,
there's three to five
things that have to get
done immediately once we are in contract.
So the sooner, the better.
You're saying on average it
takes three months?
I mean, if you had three months,
that's good?
Oh, I mean,
I would say it takes about a month.
everybody's different.
On average, on average.
Yeah.
Probably about a month.
Yeah.
Okay.
So worst case a month, best case,
three months.
You want to get people in
sooner than later.
I like it.
Okay, dude, this has been great.
I think there's always like
this question at Mike,
what's the best insurance, you know?
Um,
you guys,
do you work with preferred
insurance companies or do
you work with a lot of them?
One of them, what's the strategy?
We have a lot of different
groups that we work with
and that depends right on timing.
So some companies,
because we know their
underwriting process is
going to take longer.
We try to find the ones that, Hey, what's,
we need to get this done now.
And they're not always the cheapest,
but I tell the client up front, Hey,
if we need to do the close on this time,
because a lot of clients
want to look at quotes and
I totally understand that, right?
What's this going to cost?
Um, and then it comes down.
And then you're like, dude,
you came to me two weeks
before the close.
Yeah.
All right.
So, so to that point,
the sooner you get it going,
the better the rates you could get.
And, and,
and it opens it up for Brian to
be able to approach more people.
Um, so what I heard is,
is he can shop multiple
different companies and
depending on your situation,
get you the best deal.
But
if you show up at a month or
less before close,
it reduces his ability to work for you.
So that's a key.
That's a,
that's a big takeaway right there.
So any, any last night, go ahead.
We do have a backup
insurance company that will
take on everybody.
Awesome.
Great.
That's really great.
Okay, cool.
Any last minute tips as we
kind of come into the final
leg of this episode?
Yeah,
I would say for those of you that are
listening to this,
if you are in the process
or wanting to look at a
business anytime soon,
just start the insurances right away.
The key ones are the BOE.
Again, it might not always be required.
and the life insurance but
it's not always required
just apply in that way it's
like and you don't have to
pay for it um until you're
ready to uh you know sign
the dotted line and and
move forward with the loan
and everything else so I
would just get that knocked
out right away the general
liability the malpractice
malpractice if could take
some time depending if
there's any claims but the
general liability is very
quick typically yeah
Yeah, that's great.
That's awesome, buddy.
Thank you so much for being
on the program and kind of
debunking this insurance conversation.
I just want to remind everybody, guys,
look,
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And we are going to actually
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stefani olivia all the
people uh on the on the on
the on the next level team
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I've helped a lot of you
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it's like oh my god I own
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I think you guys need those tips as well.
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And again, thank you so much, Brian,
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Thank you for having me.
All right, guys.
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