Teeth and gums need periodic attention to prevent cavities, periodontal diseases and gingivitis. Your malpractice insurance policy needs attention, too. Examine its provisions today to make sure it’s still keeping your practice safe.
As a dentist, you know the importance of having insurance to reduce your legal exposures. That’s why you bought malpractice coverage soon after you entered the field, if not during your student days. And you may have kept the same policy in force for many years.
However, be careful: your current policy may not adequately protect you today, especially if you have changed your specialty or added additional services to your practice. That’s why it’s essential to periodically evaluate your malpractice coverage to make sure it’s still performing as intended. Also, when you first began your career in the dental practice you likely may have purchased less protection than you needed. Now is a good time to revisit that decision in light of your current financial resources.
This process is akin to you advising patients to upgrade the tools they use to care for their teeth and gums. For example, encouraging them to switch to an electric toothbrush from a manual one helps them keep their teeth cleaner, preventing future problems. Upgrading your dental professional liability insurance serves a similar function. It enables your malpractice insurance to remain as useful as it was when you first purchased it years ago.
Although it’s a good idea to periodically evaluate your policy, let’s not minimize the importance of keeping it in force even without upgrading. You made an excellent decision to buy it initially. You kept it active as you gained tenure in the business. It has shielded your business and personal assets from the malpractice risks that underlie every aspect of your job. And perhaps most importantly, it has given you financial peace of mind.
Pervasive Dentistry Risks
Your malpractice insurance mitigates the legal risks that underlie virtually every aspect of your work. Most dental risk-management experts believe the lion’s share of malpractice litigation results from performing treatments and managing treatment plans. The procedures that pose the highest risks are prosthetics, including crowns, bridges and dentures alleged to not fit properly; general dentist-performed root canals; and extraction and/or implant complications.
Other high-risk procedures include:
- Extractions of bony-impacted or partial bony-impacted teeth (not necessarily just 3rd molars).
- Complex endodontics, molar or otherwise.
- Placing of implants surgically without appropriate technology to guide you.
- Patients with significant co-morbidities.
But the above list is far from complete. Lawsuits may arise from any the following treatment-related situations (among many others):
- Complications from anesthesia
- Not diagnosing oral diseases or cancers
- Complications from administering Novocain
- Post-treatment infections
- Problems that occur during orthodontics
- Injuries caused while giving dental injections
- Adverse drug reactions
However, malpractice risks aren’t limited solely to treatment matters. They also arise from the mistakes dentists make with their business practices. For example, they may fail to identify and screen out a patient with a clearly litigious track record. Or their effort to collect past-due bills might trigger a malpractice action. Failing to properly document care is another common litigation source as is not communicating effectively with patients or maintaining a good chair-side manner.
When it comes to mitigating the above risks, it’s impossible to deny one key fact: dentists are human and as humans they make mistakes. That’s why 2,641 dentists reported malpractice claims to the National Practitioner Data Bank in 2019, with another 955 claims filed through June of 2020. Dentists who lost their cases faced an average payout of $71,000, according to the Medical Professional Liability Association. Without insurance, they’d have to pay large sums out of pocket.
Malpractice Insurance Checkup
The risks and payouts just discussed reinforce the importance of giving your current policy a checkup every few years. Here are some points to consider:
- Policy limits. These are the maximum amounts of money your policy will pay to defend you and to indemnity legal judgments or settlements after a losing court battle. For example, a policy limit of $1 million and $3 million would pay up to $1 million for a single claim during the policy period, typically in one year. The $3 million refers to the maximum the insurer will pay for all claims against you during the same period. The key here is to make sure your limit is large enough to protect you against the typical malpractice claims filed in your state. Also, make sure its size is commensurate with the current risk profile of your practice. If you provide high-risk treatments, a general rule is to make sure to max out your limits. However, it’s important to avoid having your limits be higher than those prevailing in your marketplace. This will prevent you from being the “deep pocket” in cases where a plaintiff names multiple defendants. Having said that, as you build wealth, you also want limits sufficiently large to shield your assets against punishing litigation.
- Policy “tails.” If your malpractice insurance was issued on a claims-made form, your coverage will cease to protect you once you cancel it. To make sure you’re not exposing yourself to extra legal risks, check to see whether your policy has an extended reporting provision, often known as “tail coverage.” This means if you’re sued after you leave your current job, you will still be protected. If your policy lacks this feature, ask your insurer to add it for an additional fee.
- Patient compensation funds. Another issue relating to policy limits is moving your practice from a state that doesn’t have a patient’s compensation fund (PCF) to one that does. In that case, you might be able to reduce your limit because the state fund will provide extra coverage to make liability insurance more affordable or available to dentists operating there. For example, moving from a state in which you purchased your own $1 million / $3 million policy to one that supplements your $250,000 / $750,000 coverage with state coverage of up to $1 million, $3 million would allow you to reduce your premium with limits.
- Consent to settle. This provision relates to whether you have the right to insist that your insurer defends you in court rather than settle the claim. As your practice becomes more successful, you may wish to upgrade your coverage to include so-called “pure consent to settle.” This means you can reject a settlement if you feel it’s unfair or if you believe you have a strong case. Many variations of consent-to-settle clauses give insurers the ability to compel settlements. For example, if it decides your withholding of consent is unreasonable, it can settle anyway. Or if you insist on contesting a claim, then the insurer can limit its claim exposure to the amount it wanted to settle for. With a so-called “hammer clause,” you would have to make up the difference. There are at least six other variants of consent-to-settle clauses that may have a negative impact on your professional reputation if you’re unable to clear your name in court. As part of your policy upgrade, make sure your current policy won’t saddle you with a settlement when fighting the lawsuit might have a better outcome.
- Practice specialties. If you’ve added a specialty since you originally purchased your insurance, make sure it covers that activity. This is especially important when it comes to teledentistry, which has become more popular due to the Covid-19 pandemic. If your current policy doesn’t have a teledentistry endorsement, see if your insurer can add one. If it won’t and you plan to continue providing this service going forward, it may be time to shop for another policy. Under a teledentistry endorsement, you will be covered as long as you are properly licensed and credentialed to provide dentistry where the patient receives care. You also must have a prior doctor-patient relationship and meet all clinical, privacy and other standards as required by law.
- Entity coverage. Opening your own practice is a common option for experienced dentists. If you’ve done that recently, consider buying entity malpractice coverage. This will protect your practice—not just you—against lawsuits. Talk to your insurance advisor about whether you should elect separate-limits or shared-limits coverage. The former means your practice will get its own limits, which allows your policy to pay for claims from other dentists in your practice without tapping your own personal limits. The latter means you can opt to cover practice claims with your limits. Either way, it’s important to have entity coverage so that your business receives the same level of protection as you do as a practicing dentist.
- Defense Costs. Does your current policy pay 100 percent of your lawsuit defense costs? In order to reduce claim expenses, some insurers won’t pay for defense costs, which include things like attorney, expert witness and court reporter fees, as well as for clerical and court expenses. If your policy excludes or caps defense costs, you may want to increase your limits so they’re large enough to cover both your defense costs and settlements or judgments.
- Assessability. This refers to an insurer’s ability to charge you extra if it experiences large claim losses. Under this provision, if too many dentists have claims over a certain period, the company can assess an additional fee to all dentists in the plan. Only risk retention groups, captives and trusts can use this technique. Admitted insurers can’t because their state-regulated premiums are required to have built-in reserves for unexpected losses. As part of your policy checkup, read your policy to verify whether your insurer can levy an assessment. If so, you may wish to consider doing business with an admitted insurer. For its dental malpractice programs, [360 Coverage Pros] works exclusively with admitted insurers.
- Sedation. Some dental malpractice insurance policies may have exclusions or surcharges for sedation. To upgrade your protection, shop for insurers that cover sedation or charge a lower amount for sedation protection.
- Malpractice insurers. Finally, to upgrade your coverage, consider the financial strength, technical competence and service excellence of your insurer. Lower-rated insurers (those with A.M. Best ratings of less than A+/Superior) are more likely to have solvency and claims-paying issues than higher rated carriers. In terms of technical competence, you want your insurer to have a strong mastery of how dental licensure boards and state laws define malpractice and how dental malpractice litigation works. They should be highly skilled at responding to dentists’ concerns about being sued and at managing and resolving claims. Ideally, they should have strong internet and word-of-mouth ratings, along with low insurance-commissioner complaint ratios. Finally, a highly capable insurer should have a robust risk-management program in place to help you prevent litigation even before it occurs.
The point is, just as you counsel your patients to always renew and enhance their dental self-care, you should avoid a “buy and forget” posture about your dental malpractice insurance. Since the practice of dentistry is ever changing, as is your business, it’s important to make sure your insurance is keeping pace with the change. If it has fallen behind, you may be exposing your business—and personal assets—to potentially catastrophic losses.
Compare your dental malpractice insurance with the policies available at [360 Coverage Pros]. We offer full coverage of defense costs, limits of up to $2 million/$4 million, a top-rated A+ insurer and superior customer care.