Is building a general practice different to any other business? See what the experts say and gain some useful tips and advice.
30 July 2015
General practitioners (GPs) and dentists are notoriously busy. It’s easy to become so engrossed in the practice that you overlook the importance of protecting your valuable assets.
In Australia, the only mandatory protection is medical indemnity insurance, which provides cover for professional negligence. Other insurances are not compulsory but, without them, you could be exposed to significant risks.
“Basic protection includes cover for the contents of your practice and if you own your premises, your building,” says Paul Jarvis, Head of Wealth, Business Banking South, whose team manages the wealth of clients in the NAB Health sector. “You should consider public liability insurance – like any other business owner you can be sued for personal injury or damage to property sustained on your premises. And some practitioners are also taking out business continuity insurance to cover the costs associated with things such as a computer breakdown and reinstating your data.”
Jarvis has found that many practitioners overlook their most valuable asset –themselves.
“When you’re dependent on your ability to work to generate income all of your personal and business commitments link back to this,” he says. “If you become ill or have an accident when your income isn’t protected, you’re exposing yourself, your family and your business partners to unnecessary risk.”
When it comes to insurance, good value means more than the lowest price.
“When you find what appears to be a great, cheap policy you should look carefully for loopholes and exclusions,” says Jarvis. “If there’s any chance the insurer won’t pay out on a legitimate claim you’re wasting your money. So, before you sign anything, you should make sure you’re satisfied with the insurer’s history of meeting its obligations and that the brand has a good reputation in the market. You should also consider the quality of service – are you confident that, if you do need to make a claim, the process will be quick and straightforward?”
A tailored tax strategy
Effective tax planning can also help to protect your wealth and your assets.
“It’s important to consider how you want to exit the practice,” says Jarvis. “Many GPs and dentists don’t think that far ahead, but having a clear idea of what you want your retirement to look like can help ensure you have the best tax structure in place. Your accountant will also take a number other of factors into account such as whether you have partners in the business, your personal situation and whether you have assets you want to leave to the next generation.”
Expert help, guidance and advice are crucial.
“An accountant, a lawyer, a banker and a financial planner who all specialise in the medical profession can help ensure you have appropriate protection for all of your assets,” says Jarvis. “Your financial planner can then help you build on that to increase your wealth. It’s also very important that your advisers talk to each other – you’re bound to get a better outcome when they’re all working collaboratively on your behalf.”