The time to understand your malpractice insurance coverage is not during a lawsuit, when it’s too late to make any changes. Instead, it’s important to periodically review your malpractice coverage to ensure that your insurance company and coverage fit your current practice. If you don’t, you may have purchased an insurance policy from a company that isn’t the best fit for your needs, or worse, you may not understand your coverage or your rights and obligations.
While we understand that dental malpractice insurance can sometimes be confusing, many policies contain a few standard provisions that are fairly straightforward to review. In addition, you should understand the various services provided by the insurance company. Many insurance companies provide risk management and other education and training. Talk to the company prior to purchasing a policy to see if they have any services to help you.
This article focuses on the questions to ask the company and the provisions you should review, before purchasing a policy.
Is ‘consent to settle’ required?
Settlement of a claim, after all, involves more than money. It can impact your reputation, practice, and even future insurability. Who decides if the claim will be settled…the insured…the carrier…an arbitration panel? How much control does the policy allow an individual dentist to have when making decisions regarding the settlement of a claim? If you object to settlement and the trial verdict is higher than what you could have settled for, will you be personally liable?
Ask whether you have the final voice in your defense. Know what rights, if any, the policy gives you in the event that settlement is considered. If there are any exceptions to the consent to settle clause, it is not pure consent.Occurrence or claims-made?
- 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. There is no need to purchase a ‘tail’ with an occurrence policy.
- 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 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, and the claim is first made during the policy period, your claims-made policy will respond.
If you renew your claims-made policy with the current carrier and your coverage continues uninterrupted. If you move to another professional liability carrier, however, your claims-made coverage ends. Now you’ll either have to 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 and policy termination dates, but which are first made after the policy coverage terminates. If your prior carrier is either unable or unwilling to provide you with a reporting endorsement, you will have to seek coverage for these prior acts through your new carrier.
Your new insurance carrier will most likely consider the financial stability of your prior carrier. If the prior carrier is considered financially unstable or insolvent, the new carrier will be much less willing to extend coverage for any prior acts. Since this could impact your insurability and create coverage gaps, it’s important to purchase coverage from financially stable companies. Remember that coverage, including extended reporting endorsements, is only as good as the long-term financial health of your insurance carrier.
Are there any exclusions or surcharges for sedation?
Malpractice insurance companies often require updates on your practice location and the types of procedures you perform, among other things. Many malpractice insurers apply surcharges for certain types of sedation, and some even exclude sedation. It’s important to keep your malpractice carrier informed to ensure you always maintain appropriate coverage.Beyond the policy: risk management solutions.
Does your professional liability carrier go beyond the policy to help you improve patient safety and reduce risks? 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 issues affecting today’s providers and helps you find creative answers to meet the most pressing challenges.
For more information regarding professional liability insurance and other ways to protect yourself and your practice, contact Treloar and Heisel, LLC. at 800-345-6040 or visit www.treloaronline.com.
About Treloar & Heisel
Treloar & Heisel is a premier financial services provider to dental and medical professionals across the country. We assist thousands of clients from residency to practice and through retirement with a comprehensive suite of financial services, custom-tailored advice, and a strong national network focused on delivering the highest level of service.