Choosing professional liability or malpractice coverage should not be as overwhelming as a malpractice suit itself.
Essentially, this insurance policy may provide experienced help and legal defense if you’re sued for malpractice, as well as fund payments made to the plaintiff should you settle. But beyond these basics, the details may differ greatly between insurers and even policies.
Understand what the options are, and what you need, by doing your homework before you purchase a policy. With some basic knowledge, you may be able to make a better, more confident decision for your professional risk management.
Explore some common terms and basic considerations of typical malpractice policies as you shop for coverage.
Occurrence Versus Claims-Made Coverage
Generally, professional liability coverage is either occurrence or claims-made. The major difference is whether coverage is triggered based on when the incident occurred or when actual claim is filed.
Occurrence coverage focuses on when the dental treatment occurred, regardless of when the claim is made. These policies may respond to any incident that happened during the dates of coverage, even if a suit is filed years after the policy terms have ended.
Claims made coverage generally responds to claims only if a policy is still in effect at the time the claim is made. With claims made policies, the date of the claim is what may determine coverage, not the date the dental treatment occurred. Unfortunately, changing insurance companies or switching to a different policy from a claims-made policy may lead to a gap in coverage. To avoid this, it is important when changing insurance companies that "prior acts coverage" be secured with the new company or that an "extended reporting endorsement" or "tail" be purchased from the company from which you are changing. In those cases, it’s important to work with your insurance advisor to address any gaps with additional coverage.
Consent to Settle Clauses
Some professional liability policies may not give you the freedom to choose whether to settle a claim or take it to court. A consent to settle clause may give you that choice by defining your rights and the amount of control the insurer has over whether or not to settle lawsuits against you.
Your right to choose whether or not to settle may be more important than you realize. Settling may have long-term negative effects on your career by damaging your reputation and the reputation of your practice. It may also impact your future insurability by raising premiums or even causing the insurance company to non-renew the policy.
For maximum control over settlement decisions, a “pure consent” clause requires the insurance company to get your approval before settling any case against you.
Know Your Coverage Limits
Not every professional liability insurance policy will carry the same coverage amounts. Understanding your coverage limits may be especially important if and when you’re held responsible for covering judgments that exceed them.
Check your state laws and regulations governing how much coverage you can obtain. Then, work with an advisor to find the right coverage amounts to help you confidently protect yourself and your practice.
Generally, the policy premium will increase as the coverage limits increase, but not by as much as you might expect.
Ideally, professional liability insurance may help you to reduce your risk of a suit, not just provide coverage for claims. Some insurers include risk-management benefits such as resources and programs with their policies, but it may be up to you to utilize them.
Before purchasing your professional liability insurance policy, consider asking about typical risk-management benefits including risk management webinars and online training courses, risk-assessment tools, policy and procedure templates, checklists and form templates. Taking advantage of these risk management prevention measures may even earn you a discounted policy from some insurers.
What You Need to Know About Malpractice Policies
These essential policies may serve as the foundation for your professional risk management strategy. Just be sure you’re getting the coverages, limits, decision-making power and preventative risk management tools that are right for your specific situation. Working with a knowledgeable advisor, who has experience in the dental industry, may help you to more easily navigate the options.
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.
Treloar & Heisel and Treloar & Heisel Risk Management are divisions of Treloar & Heisel, Inc.
Insurance products offered through Treloar & Heisel, Inc.
Treloar & Heisel, Inc. does not offer legal advice. Please consult a professional concerning this topic.
These policy descriptions and definitions are intended for general informational purposes only, and are not binding. For actual policy descriptions and definitions, please consult the terms of your insurance policy.