What Factors Impact the Cost of Your Dental Malpractice Insurance Policy?

Dental malpractice insurance, also called professional liability insurance, is one way to defend yourself and protect your personal assets in the case that a malpractice claim is brought against you. 

In this blog, we’ll discuss how malpractice insurance can help protect you, some of the factors that affect premiums, and how to find the right policy for you: 

Why Do You Need Dental Malpractice Insurance? 

Dental malpractice claims, which could include breach of contract, negligence, non-performance, failure to render services, and more, can be laborious, expensive, and time consuming. With professional liability insurance, you can help alleviate some of the financial burden associated with these claims. 

Depending on where you live, you may be required by law to have dental malpractice insurance coverage. However, no matter where you’re located, you should understand the factors that contribute to a malpractice insurance policy. 

In the case of a malpractice claim, professional liability insurance generally provides coverage for your defense and payments made to the plaintiff. 

As this experience can come with a number of expenses, it’s important to have a dental malpractice insurance policy tailored to best protect yourself and your practice.

How Much Does Malpractice Insurance Cost? 

Malpractice insurance premiums vary based on your personal circumstances. Here are five of the most common factors that impact the cost of your dental malpractice insurance: 

1. Age and Length of Career

At the beginning of your career, you’re likely to have lower premiums. Insurance companies may offer malpractice coverage to new dentists at a lower premium than established dentists for a few different reasons: 

• First, as a new dentist, you are unlikely to have existing malpractice claims against you, which is viewed as a lower risk. 
• Second, insurance companies want to create long-lasting relationships with their policyholders in order to solidify recurring business, just as you do with your patients. By offering you a low premium early on, they are more likely to kickstart mutually beneficial, and hopefully career-long, coverage.

Many companies also offer discounts when a dentist is entering private practice, but it is important to make certain that the cost represents "value."  For example, Company A offers a slightly lower premium, but reserves the right to settle claims without the insured's consent while Company B offers a policy with a slightly higher premium, but cannot settle a claim without the insured's written consent, also known as "pure consent."  Most would agree that Company B offers considerably more value, even though the cost may be higher. 

Throughout your career, you’ll want to work with your insurance professional to ensure your coverage scales along with your success and continues to be effective in the case of a malpractice claim. 

2. Number of Claims Against You

The number of malpractice claims filed against you can impact the cost of your policy. If you have no malpractice claims levied against you, it’s likely that the cost of your malpractice insurance policy will be lower than a dentist with multiple claims. Some malpractice insurance companies may offer a claims free discount that may increase the longer a dentist is in practice and remains claims free.  The more claims a person has, the more it may cost to cover them throughout their career, hence an increase in the price of the policy and premium. 

3. Claims-Made vs. Occurrence Coverage

There are two types of professional liability insurance policies  that are typically available to dentists: claims-made policies and occurrence policies. In general, the two main policy types are: 

• Claims-made policies cover you over a designated policy period for any malpractice claims that are brought against you within that time frame.
• Accordingly, if you have a claims-made policy and decide to change insurance companies, it is important that you secure either "tail" coverage from your current insurance company, or if available, prior acts coverage from the company to which you are changing.
• Occurrence policies cover incidents that happen during your coverage period, even if the claim is made after your coverage ends. 
• For example, you may have a claim levied against you after you’ve retired, but if the event in question happened during a time period in which you held a policy, your insurance company would likely cover you. 

4. Your Office Location

Your geographic area can impact the premiums of your dental malpractice insurance. Often, you can expect to pay more for professional liability insurance when you’re in more densely-populated areas, such as major cities. Smaller towns and rural areas are likely to require lower premiums to maintain your malpractice coverage. 

Another reason your location is an important factor is that your state may have laws and policy requirements that affect the cost. It’s vital to know these stipulations and work with your insurance professional to ensure you have thorough coverage to protect yourself, your practice, and your assets. 

5. Risk Management Education and Awareness

You may have the chance to lower the cost of your dental malpractice insurance premium through education. 

While not every company offers this, some policy providers may reduce your premium if you take certain classes, attend seminars, or educate yourself on various risk management-related topics. 

Speak with your insurance company to see if you have the ability to lower the cost of your coverage through education and awareness. 

How Do You Find the Right Policy? 

Finding the right malpractice insurance policy is a critical part of protecting your dental career. For example, if you have a malpractice claim filed against you and the award exceeds your policy limits, you may be held personally liable for judgments higher than the limits of your policy. It’s important to select your coverage limits wisely and discuss this with your insurance professional. 

By working with an insurance professional who understands the specific needs of dentists, you’ll be able to understand what types of policies are available to you, which factors will influence the cost of your premium, and how much coverage you need to protect your assets. 

Request a complimentary consultation from Treloar & Heisel to learn more about professional liability malpractice insurance today! 

About Treloar & Heisel

Treloar & Heisel, an EPIC company, offers dental and medical professionals a comprehensive suite of financial products and services ranging from business and personal insurance to wealth management. We are proud to assist thousands of clients from residency to practice and through retirement. Our experienced teams deliver custom-tailored advice through an active local presence, while our strong national network ensures that clients experience the same high level of service throughout the country.