Dental Malpractice Insurance (What is TAIL Coverage?)
What is tail insurance for dental malpractice insurance? This is one thing they usually don’t teach you in dental school. But if you are a dentist, you will need malpractice insurance. You need to be aware of different types of malpractice insurance. And potentially, you may have to pay for. First, the employer should pay for your annual premium. The annual premium is the amount needed to insure you each year. And that’s how it works. You pay a premium every year, and then you’re insured for that year. There are two common types of malpractice insurance coverage for a dentist.
Two Common Types of Dental Malpractice Insurance for Dentists
There are two common types of malpractice insurance for a dentist. One is occurrence-based coverage, and the other is claims-made. In an occurrence-based policy, tail insurance is not necessary. It just means a policy must be in effect when the malpractice occurs. The other coverage is called claims-made. Here, ail insurance is necessary because it states that a policy must be in effect when the claim is made. It’s possible if you leave an employer, someone could sue you one or two years later. And if you didn’t have a tail insurance policy, you wouldn’t be covered even though it happened two and a half years ago.
Adding Tail to Claims-Made Insurance Policy
Let’s kind of dive into the cost of these types of things. If you have a claims-made policy, which the vast majority of dental associates will have. After the contract ends, for whatever reason, it’s terminated, or it just ends. It’s not renewed, or maybe someone is in breach of contract. But for whatever reason, once the contract terminates, you’ll have to get a policy that covers the gap in between your last patient you saw and the last date that they can sue you.
For most states, it’s two years. There are some exceptions for people who are no longer minors. And it’s usually from the date you either knew or should have known of the malpractice event. It’s certainly possible that someone may not even know that malpractice occurred for a year or two. And in that scenario, that’s how they can sue the dentist after the fact. So, you’d have to purchase a tail coverage, it’s also called gap insurance or extended reporting, but it’s mostly known as tail insurance in the industry. You’d have to purchase that before the end of your current contract, which would be for a set amount of time.
So, you can get a one-year tail, two-year, five-year, or unlimited. Obviously, the longer the tail, the more expensive it is. But most policies will cover somewhere between three to five years because people figure that’s far off enough to cover any claim that people could make.
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How Much is Tail Insurance Coverage?
Regarding cost, tail insurance is generally about twice your annual premium. If your annual premium is 3000 a year, then your tail cost would be around 6,000. The shorter you’re with the employer may be down to 1.5 times your annual premium. Whereas if you’ve been there a very long time and want an unlimited tail. It could go up to 3 times your annual premium. A good rule of thumb is it’s about twice.
If it were $6,000, you’d have to pay it upfront before the contract terminates so that a policy is in place. It’s a one-time charge. You don’t have to pay it annually. You pay the six grand; that’ll cover you for as long as the tail coverage lasts. Now, who pays for that? It depends on what it says in the employment contract. Many employers will make the dental professional pay for their own tail. It’s just a matter of negotiation between you and the employer. One strategy if the employer isn’t willing to pay for it. You could ask them to make a forgiveness per year. For instance, if you had a three-year initial term. Maybe you would say that the employer would chip in 33% of the tail costs every year that you’re there.
If you leave between year two and three, they’ll pay for two-thirds of the tail. And then you’d pay for thirds long. They will pay for everything if you’re there for three years. It’s not prohibitively expensive for a dentist. Indeed, when you get into more specialized surgical specialties and that type of thing. It will be slightly more than if you’re just doing general dentistry. But it’s still something you need to think about, which most dentists have no idea about.
Which Malpractice Coverage Should a Dentist Choose?
Should a dentist choose occurrence-based or claims-made coverage? First, the two most common types of malpractice insurance for dentists are occurrence and claims-made. And if you are an employed dentist with the practice, the practice will likely use claims-made. Let’s go through the differences between the two and which one would benefit you. If you are thinking of signing an employment contract, there’s going to be a section there discussing malpractice insurance. The employer absolutely should pay for your underlying premium if you’re an employee. An underlying premium is just how much it costs to insure you yearly.
They should pay for that. Now, if it’s a claims-made policy, it means a policy has to be in effect when someone makes a claim. Say you leave an employer. There’s going to be a statute of limitation. It’s a period that someone can sue you. In most states, it’s two years, but there are exceptions. A few states have a little longer than that. But let’s use two years as an example. If you had a claims-made policy, you would need tail insurance, which covers the gap between when you leave, and the last day somebody can sue you. A claims-made policy versus an occurrence policy is kind of the differentiator’s price. With an occurrence-based policy, you don’t need tail insurance. But it’s about a third more expensive than a claims-made policy.
Add Tail Coverage in Your Insurance
A claims-made policy would be a third cheaper than an occurrence-based policy. However, you would be responsible for paying for tail insurance. And a good rule of thumb is tail insurance costs about twice your annual premium. Let’s say an annual premium of $4,000. Then if you’re responsible for paying for tail insurance, it would be around $8,000. Now, that’s a one-time cost, it’s not yearly. And you would pay that prior to the contract’s expiration, or if it’s terminated on your last day of work. And you’d have to pay the entire amount upfront, but then you would be covered for however long.
The tail costs can vary a little bit based upon two things. One, how long you’ve been with an employer, and then two, the length of the tail. So, it can be anywhere from 1.5 times your annual premium, all the way up to three times. Based upon those factors.
You would rarely have an employer say to you, we can offer you both policies, we can do occurrence-based or claims-made. Well, if it’s up to you, you should get an occurrence-based policy so as not to worry about tail insurance. It’s a no-brainer. If they say to you, we’ll pay for whatever underlying annual premium it is, and it’s up to you. Then get an occurrence-based policy. Maybe you’re an independent contractor and whoever your employer will be stated, you’re responsible to pay for the annual premium. And if you get claims-made tail, that would be a scenario where you would have to decide.
When To Use Occurrence-Based Policy
Think of it this way. If you’re working for someone as an independent contractor, and let’s just say you’re only going to work for one year. And you can choose between either coverage. In that scenario, it would make sense to get an occurrence-based policy. Let’s just say you have a, as I said before, $4,000 annual premium. At the claims-made level, it’s a third more, so you’d be paying roughly $5,300 yearly with an occurrence-based policy. Wherein if you had a $4,000 claims-made policy. The contract ends, and it’s twice as much, then you have to pay 4,000 for the annual premium. Plus 8,000 for the tail, maybe a little bit less than that. So, you have a $12,000 total cost if you went with claims-made and if you’re only staying with an employer for one year. And then if you had an occurrence-based policy, you’re only paying 5,300.
Occurrence-Based Insurance Policy for a New Dentist
So, you’re saving roughly $6,700 just by utilizing an occurrence-based policy. That scenario, once again, makes complete sense. Now, if you’re staying with an employer for a long period, or as an independent contractor. Let’s say it’s 10 years. You’d have to do the math. If I’m paying a third more per year over 10 years, is that going to be more expensive than having a policy that’s a third cheaper and then tacking on $8,000 at the end?
The longer the time you’re with an employer, the more it makes sense to go with a claims-made coverage. If you had the choice. In my opinion, expecting to work an extended period like 5 or 10 years with one practice is foolhardy. With the proliferation of all these corporate dental practices swooping in and buying up all these dentist-owned practices. Places that were great to work with before are now maybe not so great to work at. So I would not go into any relationship expecting it to last more than 5 to 10 years. It’s just improbable in this environment that that would happen. So, that’s a breakdown of occurrence versus claims-made. And then maybe which one you should choose if you’re looking for a new position.
How Much Does Tail Coverage Cost for a Dentist?
How much does tail insurance cost for a dentist? First, let’s talk about when you would need tail insurance, and then we’ll talk about how much it costs. There are two common medical malpractice policies for dentists, and that’s either occurrence-based or claims-made. An occurrence-based policy requires a policy in place when the incident occurs. Tail insurance is not necessary. Under a claims-made policy, a policy has to be in effect when someone makes a claim. You may terminate a contract and leave an employer, but there will still be a statute of limitation. The period that somebody could sue you for malpractice in most states, it’s two years.
There are exceptions, but I’ll say for these purposes, it’s two years. Tail insurance coverage covers the gap between when you leave an employer and the last day somebody can sue you. Most places require tail coverage to be at least two years at most. In the employment contract, it’s going to state who is responsible for tail insurance if you have a claims-made policy. If it doesn’t say that, you must figure it out and ensure that language is there before signing the agreement. In the agreement, it will have a section that states that the employer will provide the underlying annual premium. It’s how much it costs to insure you yearly. And then usually, it will state what type of policy they utilize. And if it is a claims-made policy, who’s responsible for paying for tail insurance.
Why Employers Prefer Claims-Made
Often, the dental practices will put the burden to pay the tail insurance on the dentist leaving the practice. They would use one policy over another because an occurrence-based policy is generally about a third more expensive than claims-made. Suppose the employer uses a claims-made policy. Which is a third cheaper and puts the onus on the dentist to pay the tail insurance costs. In that case, they’re saving a decent amount throughout an employment relationship between them and a dentist.
So, how much does it cost if you are responsible for paying for tail insurance? Well, a good rule of thumb is it’s about twice what your annual premium is. As I said before, the annual premium is how much it costs to insure you yearly. And you multiply that times two, which will be how much you must pay for tail.
Tail Coverage Cost
It’s a one-time charge, so you don’t have to pay tail insurance yearly. It’ll be covering you for however long a policy you choose. I would suggest if they had, and will have, an unlimited tail coverage, which will cover you indefinitely. That’s the way to go. As I said before, there are some exceptions and then some longer statute limitations based upon your state. And so, it would be a bad idea to get a policy that didn’t cover the entire amount. If you get sued, and there is no insurance to cover you. You may be personally reliable for those damages if it gets to that point. Then you’ll have to pay for your attorney and go through that. And then the settlement will come out of your funds.
So, it just makes sense to pay by the indefinite tail. That way, you’re covered. How much it costs kind of varies based upon specialty. If you’re doing general dentistry, it’s going to be a little bit less. And if you’re maybe an endodontist or doing some more surgical procedures, it would be more expensive. But I’d consider a reasonable amount for insurance is somewhere between 2,000 to 4,000 for an annual premium. Which would not be uncommon for a general dentist. And so, your tail costs would be somewhere between 48,000 in that scenario. Not a prohibitive amount of money, but still an amount you’re most likely going to pay for. Essentially a budget that you’re going to pay for that amount.
Lastly, it has to be paid before the termination of the contract. So, before the contract terminates, you must purchase that policy. The employer would then require you to prove that you had purchased that policy. That’s how much tail insurance costs.
What is Dental Malpractice Insurance and How Does Coverage Work?
Dentists encounter unique risks and challenges in their careers. The increased exposure to dental malpractice affects many dentists, with about 242 dental malpractice cases recorded yearly. This leaves many dental professionals financially and emotionally drained since they must pay for the damages incurred by patients during dental care. This usually amounts to huge fines, penalties, and even a bad reputation that may affect the dental practice and dentist’s careers in the long run.
As a dentist, it is imperative to protect yourself against liabilities that may arise from dental negligence by acquiring dental malpractice insurance. This coverage plays a crucial role in meeting your financial needs and protecting your practice, assets, reputation, and employees when a patient files a dental malpractice case against you. Below is essential information about dental malpractice insurance.
What Is Dental Malpractice Insurance Coverage?
Dental malpractice insurance is professional insurance coverage that protects healthcare providers from incurring financial losses on injury claims filed against them due to medical negligence from the practice. It helps dental professionals avoid covering the liabilities from their pockets. This coverage is usually necessary because injury claims can be huge and can affect the practice operations due to financial losses in the long run.
What are the Common Dental Malpractice Claims?
There are different dental malpractice claims that a patient can sue you for negligence when you deviate from the required ethical standards in the healthcare sector.
Knowing the dental malpractice claims is imperative to help you make informed decisions when a patient sues you for negligence. Below are the most common dental malpractice claims.
- A dentist using too much force on a young patient
- Removing teeth that don’t need to be removed
- A broken dentist instrument inside a patient’s tooth
- Misdiagnosis, infections, delayed treatment
- Not using the suitable anesthetic
- Dental issues resulting from a broken jaw, broken tooth, and extractions
- Improperly sterilized or non-sterilized dental tools
It is worth noting that some malpractice claims occur more frequently than others. This can lead to negligence claims when you least expect it. Having malpractice insurance can save you a lot of headaches and financial losses. It may also be suitable to hire an experienced Dental Contract Lawyer to provide you with a dental contract review for your practice.
Who Needs Dental Malpractice Insurance?
Dental malpractice coverage is essential for dentists, dental hygienists, dental or dental hygiene students, and dental entities. So it is basically for anyone directly interacting with patients to provide dental care because they are susceptible to dental malpractice claims. Whether full-time, part-time, a volunteer, or a beginner in dental practice, you may need dental malpractice coverage.
What Does Dental Malpractice Insurance Cover?
Dental malpractice policy covers different claims based on various factors such as the type of insurance company, damages incurred by the patient, and the severity of the matter. If a patient sues you for malpractice, you may need to pay them for the damages incurred whether the claim bears any truth or not. Below are the types of damages you may need to pay the patient.
- Compensatory and punitive damages
- Arbitration costs
- Attorney and court fees
- Settlement costs
- HIPAA violation fines
It is best to do due diligence when looking for an insurance provider for your dental practice and choosing the right policy that suits your needs. Some providers impose high claims, so you should inquire and research before selecting an insurer. You should also check the policy limits and what it covers and doesn’t cover (like non-compete violations).
If you are experiencing any doubts about dental malpractice, it is best to consult an experienced dental attorney such as Chelle Law for dental associate employment contract review services.
How Much Is Dental Malpractice Coverage?
The cost of dental malpractice insurance depends on various factors listed below.
- Whether the patient suffered physical pain
- Whether the dentist can work on the injury and correct it
- The dentist’s professional background
- The seriousness of the damage caused
Whether the injury affects the patient’s future activities such as speaking and chewing.
It also depends on the policy type, how old your practice is, your location, and the purchase policy amount. For instance, a newly established dentist may pay lower rates within the first five years of operations.
It is best to analyze your practice needs and choose the right dental malpractice coverage. You can also work closely with an insurance agent to take you through their policies, thus, making informed decisions before signing up for the policy.
The insurance company will use various parameters such as your personal claims history and state requirements to determine your yearly premiums and tailor the right coverage for your practice while also spreading risks for the entire coverage period.
What Should You Look for in a Carrier for Your Dental Malpractice Coverage?
You need to factor in so many things when looking for an insurance provider for your dental practice. With multiple dental malpractice carriers around you, it is imperative to take your time and search for an insurance company that can meet all your needs and expectations.
Look for the best provider that offers quality services and good customer care. The provider should have in-depth experience in the field and should be willing to show you how dental malpractice coverage works. Check the company’s claim procedures, premiums, and risk management programs for supporting dental practices.
You can check the carrier’s website and social media pages to know about them before committing to their services. It is also best to ask other professional dentists for referrals from other dental professionals for reputable insurance carriers who can give discounts and offer emotional support to defendants.
If you’d like to know more about dental malpractice insurance, we can help. Chelle Law has experienced attorneys who can take you through the process and offer you legal advice.
Get a Professional Dental Contract Review from an Experienced Arizona Lawyer
If you are looking for dental contract review services for your practice, it is imperative to hire an experienced dental lawyer to guide you through. Chelle Law has experienced lawyers who can help you with contract review for your dental practice. Contact us for effective contract review services for your dental practice.
Claims Made Insurance for a Dental Associate Explained
What is claims-made insurance for a dentist? Every dental professional needs a malpractice policy while they’re practicing. And there are two common types of malpractice insurance: claims-made and occurrence-based. Claims-made insurance policy means a policy must be in effect when someone makes a claim. Say you’re an employee and leave an employer. There’ll be a gap between the last patient you see for that employer and the last day they can sue you. That’s the statute of limitations. And generally, it’s two years in most states. It varies from state to state. And there are also exceptions for minors becoming adults and that type of thing.
But let’s use two years as an example. Someone has two years to sue you. If you had a claims-made policy, you need an additional insurance policy that covers that gap, called tail insurance. If you have a claims-made policy, you need tail insurance. An occurrence-based policy means a policy must be in effect when the incident occurs. No tail insurance is necessary for an occurrence-based policy.
Now, the main difference between the two is cost. An occurrence-based insurance policy is about a third more expensive per year than a claims-made policy. And then, after a claims-made policy ends, you must purchase tail insurance. Tail insurance is about twice your annual premium. So, if you had a $3,000 annual premium and had to pay for tail insurance under a claims-made policy. It would be a $6,000 payment, depending upon who’s responsible for it, that they should pay. That’s a one-time charge and doesn’t go on year to year. You just pay it all upfront.
How to Get Tail Malpractice Coverage
Normally, the employer would require a secured tail coverage before the end of the employment relationship between the two parties. If the employer says, it’s your choice what insurance policy you want to use, it will depend on who’s paying. If the employer says, I don’t care if it’s an occurrence or claims-made, we will pay the premiums. Then obviously, you want an occurrence-based policy because you won’t have to pay for tail. Most of the time, you don’t get a choice. Often, it is claims-made. And mostly, the employer will require the dental professional to pay for tail insurance.
A couple of ways to handle that. One, you can negotiate in advance to get the employer to cover the cost of tail insurance. If they’re unwilling to cover all the costs, one thing we’ve been successful with is forgiving an amount of it. Depending on how long you’ve been there. Suppose you have a three-year initial term. Then we’d say, alright, for every year that the dentist stays employed, one-third of that tail cost is then forgiven.
That way, if you’ve been there for three years, you wouldn’t have to pay for the tail after you left. That’s been an effective way of getting them to cover some tail insurance costs. Another one would be if you were in a state, used an insurance company, and switched jobs. Then the new job uses the same insurance company as the old job. Most of the time, they’ll just roll over your old policy into your new one.
Claims Made Coverage Needs Tail
In that way, you wouldn’t have to pay for a tail. And then the third way of getting out of having to pay for tail is if your new employer pays for your old tail. And that’s called nose coverage. It’s not prohibitively expensive for most general dentists. If you get into some subspecialties into surgical specialties, that type of thing can be more expensive. But it’s not a break-the-bank type cost. If you have claims-made coverage, you do not want to go on without tail coverage. I have had a few people who said, you know what, I don’t want to pay the tail costs. I’m willing to accept the risk.
And it just seems like a foolish risk to take $6,000 to cover your tail. Whereas a dental malpractice insurance claim could be many multiples of that potentially. Plus, I would hate to have that hanging over anyone’s head. Anyway, that’s a little primer for claims to make coverage for a dentist.
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