The Explorer Winter 2018 Explorer Winter 2018 | Page 7

HOW TO HANDLE EQUIPMENT
FAILURE
By: TDIC Risk Management
When faced with equipment failure,
practice owners must be prudent with
their actions should they seek to file a
claim with their insurance carrier. At
best, failure to preserve property can
result in a delay in payment; at worst, it
can result in the loss not being covered
at all.
Some practice owners are unaware that
many insurance companies, including
The Dentists Insurance Company, have
the right to inspect malfunctioning
equipment in order to determine the
cause of failure. Under most policies,
some causes are covered, while some are
not. The burden of proof to establish
that the cause of the loss is covered rests
with the insured.
“It is a policy requirement that we are
provided an opportunity to inspect the
broken equipment, and along with this
requirement is the policyholder’s
responsibility to preserve the property
in question,” said Sheila Davis, assistant
vice president, Claims and Risk
Management Claims, TDIC. “This is
essential so that we can determine
whether the loss is covered. Disposal of
property without our go-ahead could
affect your claim.”
In 2015, TDIC had a total of 446
property claims with an average value of
$30,000-$50,000, not including loss of
income. Most claims were due to water
damage, typically resulting from the
failure of a water supply line to dental
equipment.
A common scenario is this:
Unbeknownst to the practice owner,
there is a point of weakness in the water
system. Perhaps there is a loose
compression fitting, a worn valve or a
tiny hole in a piece of flexible tubing. At
night, or over a weekend, when the
water is not being used, the water
Los Angeles Dental Society Explorer
equipment independently. If there is no
equipment to inspect, it is difficult, if not
impossible, to hold the at-fault party
accountable.
pressure builds and the dam bursts,
flooding the office.
When faced with a situation like this,
practice owners need to follow certain
protocols. Because of the complex
nature of dental equipment, they should
preserve not only the entire mechanism,
but the failed parts as well.
“Each of these can usually be examined
to determine why the failure occurred
and which part failed,” Davis said. “But
if the equipment is disposed of, then the
opportunity to determine how and why
the failure occurred is lost.”
Some practice owners erroneously
assume the repair technician’s report
can be used to obtain this information.
But the reality is, most of these
“reports” are just invoices; they often
lack the details needed to make a
determination of cause.
“We need to know exactly how the
equipment malfunctioned and why it
failed. Tech reports don’t generally
disclose this,” Davis said.
In addition, the opportunity to recover
the amounts paid in the claim from the
responsible party may be lost if the cause
of the damage is disposed of. For
example, should an insurance carrier
determine the loss was caused by a
manufacturer’s defect, the manufacturer
would have a right to inspect the
In some cases, practice owners don’t
want the equipment taking up precious
office space, nor do they know what to
do with the broken equipment once a
claim is in process. But more often than
not, technicians will be happy to return
for the equipment in a few days, after the
insurance representative has had a look.
“For any type of equipment breakdown,
it’s better to err on the side of caution
and keep the equipment. In most cases,
we can send out someone to inspect the
equipment or failed component the same
day or the following day,” Davis said.
In one recent case, a dentist experienced
the failure of her vacuum. Knowing she
couldn’t afford to close her practice
during the claims process, she replaced
it, storing the broken one on site. TDIC
was able to get an inspector out to her
practice right away, and she was able to
continue seeing patients while her claim
was being processed.
“We understand that you can’t afford to
have downtime,” Davis said. “But by
calling us in tandem with calling a
technician, and by preserving your old
equipment, you can ensure your claim
will be processed smoothly.”
Experiencing an equipment breakdown
is an unfortunate reality of the dental
profession. As a practice owner, the
steps taken during this time can mean
the difference between a smooth
recovery or a complicated one. By
following a few simple protocols,
dentists can get back to business quickly
and painlessly. 䡲