Questions About Malpractice Insurance?

Here are a few we hear over and over again.

By Jamie L. Fehrs, MBA

 How much do I need?

A common question we get from dental practitioners is “how much malpractice insurance should I carry?” This is a tough question to answer, because it all depends. Every situation is different. Ultimately, you’ll want to evaluate your exposures and your procedures and make sure that you are carrying what’s appropriate for you.

Where do you practice? Your state may have a say in the matter. Sometimes a state will have certain requirements or minimums. In Pennsylvania, for example, the Pennsylvania Dental Board says that to practice and maintain a dental license you need to have $1 million to $3 million dollars in professional liability coverage. Many people assume that that’s what they ought to carry, but that’s just the state saying, “this is the minimum coverage you need.” This range may be completely inadequate for you.

Do you have a specialty? The type of dentistry you practice will also play a role in how much coverage you may opt to obtain.  A pediatric dentist deals with a population that needs to be treated with extreme care, for which it would make sense to have higher coverage. If you use a lot of sedation, you will want to increase your malpractice coverage as the use of anesthesia is considered more risky. Likewise, if you do any kind of implant dentistry, you will probably need higher coverage levels than a dentist who’s not placing implants.

What is your risk profile? If you are risk averse, you will probably look to get higher coverage. Keep in mind that in the large scheme of things, it costs relatively little to transfer risk from you to an insurance company. The old adage “penny wise, pound foolish” is a practice you may want to avoid when it comes to determining your malpractice coverage.

Should I choose occurrence or claims-made coverage?

If there’s no compelling reason to get claims-made coverage, we believe that occurrence coverage is a more sensible choice for most. To refresh your memory on these two types of malpractice insurance… an “occurrence-based” policy covers any claim that occurs during the period of coverage, even if the claim is filed after the policy lapses.

A “claims-made” policy responds to claims based on when the claim is first made regardless of when the incident actually occurred.  It is important that if an individual changes insurance companies or retires that coverage be obtained for prior exposures.

What kind of consent clause should I choose?

In the event of a lawsuit against you, there are certain consent clauses that give the insurance company the “OK” to settle. We typically recommend that your policy include what’s called “pure consent,” which basically says that you decide if the company will settle on your behalf.

Ask for help

As always, we have to point out: work with a financial professional who understands the unique needs of dentists and specialists. You’ll want guidance from a subject matter expert in your professional liability needs.

19-026

Jamie L. Fehrs, MBA, is financial services associate for Treloar & Heisel, Inc. She can be reached at jfehrs@treloaronline.com.