Navigating the Dental Malpractice Maze

Nancy Stahulak Business Fundamentals Navigating the Dental Malpractice Maze

There are a variety of decisions you will have to make over the course of your career. One of the most difficult could be selecting a professional liability carrier. After all, not only do you have to wade through unfamiliar terms, but you have to make a decision that will affect you years down the road. While it may seem like a daunting task, sometimes just having the right questions can make all the difference.

At this point in your career, you most likely have never been sued. Your fellow students probably have never been sued. You may not know anyone who has ever been sued. However, it is important to recognize that each year approximately 8,500 of your colleagues are named as defendants in malpractice lawsuits according to the National Practitioners Data Bank. A lawsuit is not necessarily the tool that measures “good” or “bad” dentistry, but the end result of a malpractice claim can be traumatic, time-consuming and expensive— regardless of the final verdict.

Dental liability insurance can be confusing. What questions should you ask? What do you need to know about your policy?

First, you need to read the policy carefully. Ask the insurer if there are any other documents (such as an association’s bylaws) that might impact your rights and obligations. Review this information with an attorney experienced in insurance and contract law. Ask the following questions:

Is consent to settle required? How much control does the policy allow an individual dentist to have when making decisions

regarding the settlement of a claim? After all, settlement of a claim i n v o l v e s more than money – it can impact your reputation, your practice and even future insurability. Who decides if the claim will be presented to a jury…the insured…the carrier…an arbitration panel? If you object to settlement and the trial verdict is higher than what you could have settled for, will you be personally liable?

between an incident and a resulting claim, claims-made policies contain a retroactive (or “prior acts”) date. This retroactive date allows the policy to look back in time and consider prior incidents. As long as the incident took place after the policy’s retroactive date (or “prior acts date”), and the claim is first made during the policy period, your claims-made policy will respond.

Ask if you have a voice in your defense. Know what rights, if any, the policy gives you if settlement is considered.

Occurrence or Claims-Made? Your policy will most likely provide professional liability coverage on either an occurrence or claims-made basis.

If you renew your claims-made policy with the current carrier, your coverage will continue uninterrupted. However, if you move to another professional liability carrier, your claims-made coverage ends and you will have to either obtain a reporting endorsement from the prior carrier (often referred to as “tail” coverage), or purchase prior acts coverage from the new carrier. A reporting endorsement allows you to report claims based on incidents that took place between the retroactive date and policy termination date, but are first made after the policy coverage terminates. If your prior carrier is unable or unwilling to provide you with a reporting endorsement, you will have to seek coverage

Occurrence coverage responds to claims based on when the incident occurred, regardless of when the claim is actually made against you. As long as the incident occurred during the policy period, your occurrence policy will respond— even if the claim is made after the policy period expires.

Claims-Made coverage, by contrast, responds to claims based on when the claim is first made against an insured. Given the length of time that can pass

for these “prior acts” through your new carrier.

However, new carriers will consider the financial stability of your prior carrier. If the prior carrier is considered financially unstable or insolvent, the new carrier will be less willing to extend coverage for any prior acts. Since this could impact your insurability and create coverage gaps, it is important to purchase coverage from financially stable companies. Remember, coverage, including extended reporting endorsements, is only as good as the longterm financial health of your carrier.

As with the policy itself, you need to review the language of any reporting endorsement offered. Understand your right to obtain an offer of tail coverage, how the premium (if any) will be determined, and the length of time you are given to report claims.

What triggers coverage? Whether you have a claims-made or occurrence policy, you need to understand what triggers coverage. Does the claims-made policy, for example, allow you to trigger coverage by

Approved PACE Program Provider FAGD/MAGD Credit Approval does not imply acceptance by state or provincial board of dentistry or AGD endorsement (4/1/2008) to (3/31/2012)

reporting incidents you reasonably believe could result in a claim? If not, when can you trigger coverage? Do you have to wait for a formal demand for damages or lawsuit before the policy responds?

fessional liability carrier go beyond the policy to help you improve patient safety and reduce risk? Do you have access to the tools and resources necessary to support those efforts?

Effective risk management is critical for all healthcare professionals. It requires extensive knowledge of the myriad of issues affecting today’s providers, and helps you find creative answers and meet the most pressing challenges.

Is your premium guaranteed? Typically, admitted professional liability carriers are “Advance Premium” companies. This means that the premiums paid by the policyholders are established at the beginning of the policy period and are guaranteed not to increase regardless of any adverse loss development experienced by the company for that policy year.

Understanding the relationship with your professional liability carrier is critical. Invest the time to examine your policy’s benefits, coverages, and costs.

What about policy cancellation or modification? What if there is a change to the policy terms or conditions? Will you receive advance, written notice? Will you have the opportunity to examine your options and secure alternative coverage if necessary?

Ask questions. Compare offerings. Information is Power. ■

At Medical Protective we’re proud to offer you our expertise and dedication to fulfill and service your insurance needs as they develop and change.

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