Business Property Insurance for Dentists & Medical Professionals: Business Property Protection vs. Improvements & Betterments Explained

Contributed by Luke Fehrs

If the title of this piece has your head spinning already, you’re not alone. Insurance jargon can be convoluted and confusing. Add to that that your real job, running a dental or medical practice means juggling patient care, staff, and operations, you really can’t be expected to know all these terms, too. Unfortunately, you can’t afford not to read the fine print in your insurance policy (or lease) because one overlooked detail could leave you with a huge bill if disaster strikes. A fire, flood, or other property loss can put your practice on hold. The right coverage can help you reopen quickly, while the wrong coverage can leave you rebuilding on your own dime.

Two critical types of coverage every commercial tenant should understand are Business Personal Property (BPP) and Improvements and Betterments (I&B).

Business Personal Property Coverage for Dental & Medical Practices

Picture this… If you unscrewed every piece of dental equipment from the floor, unbolted the chairs, cut the roof off of the building, and turned it upside down—everything that fell out would go with you to the next office. That’s your business personal property.

BPP includes your movable equipment, furniture, computers, and supplies. In a dental office, that means dental chairs, x-ray machines, tools, IT equipment, and anything else you can take with you.

The coverage amount should be based on the direct replacement cost of these items. You can determine this by looking at purchase agreements, supplier quotes, or industry equipment lists.

What Is Improvements and Betterments Insurance for Commercial Tenants?

Now think about the parts of your space you can’t just pick up and move: the walls, flooring, light fixtures, cabinetry, and built-in features that make your office functional. That’s what Improvements and Betterments coverage protects.

If you removed all your movable property and a fire destroyed the building, you (as the tenant) would still be responsible for rebuilding the interior in the event of a total loss.

In most cases, a landlord will only restore the building’s “shell.” This means the four walls, a ceiling, and a floor. You would walk back into a barren shell and have to reconstruct everything else yourself.

Valuing I&B coverage is less straightforward than BPP. It’s often estimated based on local construction costs per square foot. A rough starting point might be $250/sq. ft. at the time of this writing, but that number climbs significantly in large metro areas.

Avoiding Disputes with Landlords Over Insurance Responsibilities

Many disputes between tenants and landlords after a property loss happen because of unclear expectations. Both sides often assume the other will pay for the interior rebuild, which can lead to costly delays and frustration.

It’s also becoming more common for landlords to specify in the lease agreement that tenants are required to carry coverage for improvements and betterments, precisely to avoid this kind of finger pointing.

Why Your Lease Agreement Is the Key to Proper Coverage

Your lease is the ultimate guide to your insurance responsibilities. It spells out exactly what you’re on the hook for if your space is damaged or destroyed.

Always have an attorney review your lease before you sign and before you purchase coverage. Insurance agents can give you a general understanding of what’s needed, but they can’t interpret your contract with legal authority.

Here’s a business property protection checklist you may find helpful:

Business Property Protection Checklist

Business Personal Property (BPP)

☐ List all movable items you own: equipment, furniture, computers, supplies.

☐ Calculate your replacement cost (use purchase agreements, supplier quotes, or inventory tools).

☐ Confirm with your insurance agent that your BPP coverage limit matches today’s replacement value.

Improvements & Betterments (I&B)

☐ Identify fixed interior features you’ve added, like walls, flooring, lighting, cabinetry.

☐ Get a cost-per-square-foot rebuild estimate from your local contractors.

☐ Make sure your I&B coverage matches the full rebuild cost, and not just what’s in your budget.

Lease Agreement

☐ Review your lease for clauses on rebuild responsibility.

☐ Confirm what your landlord’s policy covers (usually the “shell” only).

☐ Have an attorney review it before you sign or renew.

Annual Review

☐ Recalculate equipment values annually, because things do change in price.

☐ Update your I&B estimates for inflation and construction cost changes.

☐ Adjust your coverage whenever you renovate or add major equipment.

Understanding the difference between Business Personal Property and Improvements and Betterments coverage, and making sure both are valued correctly, can save you from expensive surprises. The goal after a loss should be to get back to seeing patients quickly, not arguing over who pays for the drywall.

Do you have a question about business insurance?

We have answers! Contact us today for a no-obligation conversation with one of our experienced business insurance team members.

About Treloar & Heisel

Treloar & Heisel, an EPIC Company, is a financial services provider to dental and medical professionals across the country. We assist thousands of clients from residency through retirement and strive to deliver the highest level of service with custom-tailored advice and a strong national network. For more information, visit us at treloaronline.com.

Luke Fehrs is Account Executive, Treloar & Heisel, LLC,domiciled in PA.
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Insurance products offered through Treloar & Heisel, LLC.