Understanding the Many Insurance Policies You Need as a Practicing Dentist

Insurance coverage for new graduates is a very important part of their future as they begin their careers in dentistry. There are many other things to consider when preparing for a career in delivering great oral care to patients, but insurance planning is not something to be overlooked.

Below is a brief outline of the different types of property and casualty insurances that are necessary to protect your interests.

The following outlines all pertain to Property and Casualty Insurance for Dentists:

Upon graduation from dental school and/or your residency program, every dentist must obtain Professional Liability coverage (malpractice insurance) when they are offered a job. In the event of allegations and/or a lawsuit for alleged negligence, malpractice coverage will cover defense costs (attorneys’ fees) and indemnity settlements.Malpractice insurance will not cover sexual harassment.

There are 2 types of Malpractice Coverage.The following is a brief outline of each type of policy:

• Occurrence Form – This policy bases coverage on when a claim occurred vs. when a claim was made. Whether or not the policy is active and in-force, the insurance carrier will respond to the claim according to the terms and conditions of the policy if the incident occurred while the policy was active and during the policy period. With an Occurrence policy, no tail coverage is required at the termination of the policy.
• Claims-made Form – This policy bases coverage on when a claim is made (vs. when a claim occurred) and whether you had an active policy while the claim was made. If the policy was canceled, you would need to purchase tail coverage (Unlimited Extended Reporting Coverage) retroactively to the initial date of coverage of your Claims-made policy. This is necessary in order to be covered when a claim is made against you. If you change malpractice carriers, you must have the new malpractice carrier issue you a Retroactive Date of Coverage also known as the Initial Date of Coverage. This date would be the date you started with a Claims-made policy. Also, there can be no gap in coverage between carriers. This will guarantee that you will remain covered for any claims or incidents that occurred prior to obtaining coverage with the new carrier.

When joining a large dental group such as a DSO (Dental Service Organization) or MSO (Managed Service Organization), they may offer you malpractice coverage on a Claims-made basis through their group policy. Please note, in the majority of these cases, the dentist will be responsible for purchasing Tail Coverage when they leave or terminate their employment with the group. Tail Coverage can be quite expensive. If you choose not to purchase Tail Coverage, you will have no coverage for any claims or incidents that may arise against you while you had an active policy.

Another consideration when choosing your malpractice insurance carrier, is called the “Consent to Settle” clause which is written within the policy. This clause is usually called the “Hold Harmless” clause and can give the right to the insurance carrier to settle a claim without your consent. There are several carriers that offer the “Pure Consent to Settle Clause” which means the insurance carrier can never settle a claim without the insured’s consent. Pure consent to settle is not always associated with a higher premium.

Purchasing Your Own Practice

If you purchase a practice, you will want to add the Entity (name of your practice) to your malpractice policy with shared limits. However, if you have additional dentists practicing in your practice, you should consider obtaining a separate Entity policy which offers you coverage for the entity with Separate Limits of Liability.

• If you purchase a practice, in addition to separate Entity coverage, you will be required to purchase a Businessowners policy (Commercial liability) which covers the Business Personal Property, and the building if you are the owner of the building. If you are a tenant, only Business Personal Property is required to be purchased. This would cover any damage to your operatories, computers, furniture, supplies and fixtures, along with any other business personal property.
• Cyber Liability is now offered under most Businessowners policies. Also included under the Businessowners policy would be Business Interruption coverage which covers a loss of income due to an unexpected event.

Employers Practices Liability Coverage

This coverage can be added to a Businessowners policy. Separate limits are set up under this coverage. This coverage will cover such things as Wrongful Termination. It is always wise for the owner of the practice to add this to their Businessowners policy for additional protection.

Workers Compensation Coverage

This coverage is required in most states and will cover your employees’ costs for injury, illness or death as long as it was work related. If you have ANY employees, it is imperative to have a Workers’ Compensation policy. This can be purchased through the state or with a private company. If the state is notified that you do not have Workers Compensation coverage in place, the fines issued by the state can be astronomical.

In conclusion, this article is not intended to discuss all the different types of insurance necessary for the needs of a dentist. This is why it is highly recommended to contact an experienced Property and Casualty Insurance Agent who can answer all questions regarding your insurance needs.

It’s important that clinicians have all of their insurance needs properly covered so they can focus on what’s most important —providing great care to their patients.

Elizabeth Slane is the President of the ES Agency LLC and can be reached at 631-265-5860.