There are so many malpractice insurance companies out there. Here are the ones that I'm investigating:
1) Medical Protective (aka MedPro) - since 1899 - offers both OC and CM
2) TDIC (The Dentists Insurance Company) - since 1980 - offers only CM
3) Dentist's Advantage - over 50 yrs - offers both OC and CM
4) Mitchell and Mitchell (aka CNA, PPP) - since 1969 - offers only CM
5) Marsh (from Proliability.com, aka Liberty) - since 1871 - offers both OC and CM
First off... disclaimer, I'm not giving insurance or legal advice. I am only presenting my findings.
So what should you compare first off? Well there's basically two types of policies: Occurrence (OC) and Claims Made (CM). Some companies only offer CM, and some offer both OC and CM. What's the difference? OC insurance policies cover you as you are when the dental procedure happened, whereas CM insurance policies cover you as you are when the claim is filed. For example, you do a procedure in 2011, but in 2012 a patient files a claim. In OC, you are covered as you are in 2011, and in CM, you are covered as you are in 2012. Which is better? Here's my pro and cons list... and let me know if you think I'm leaving anything out.
CM:
-Pro - 1) cheaper; 2) insurance policies can change for the better
-Con - 1) may need to purchase tail insurance if you move to a different state, retire, become disabled, or die (tails can be 150-200% of your yearly premium, but is free after a certain number of years staying on with a company); 2) insurance policies can change for the worse
OC:
-Pro - 1) includes a built-in tail (meaning you never have to purchase your retroactive date, and the policy is permanent); 2) insurance policies can change for the worse, but that's ok because you were covered when the procedure occurred!
-Con - 1) more expensive; 2) your policy dies with the company if the insurance company sinks (so it better be a reputable long lasting company!)
When you really think about it, it really boils down to how you believe insurance companies change over the years. If your malpractice insurance policy is improving, then CM sounds like the better deal. But if your CM policy might not be renewed, and if your policy may suddenly have exclusions now that weren't there years ago, then OC sounds like the way to go instead.
Of course, there are some other things to consider when examining the various companies. I personally felt like I was battling between TDIC and MedPro... Mostly because I didn't know a whole lot about the others and hadn't heard anything from other dentists.
Articles to read to get yourself more familiar with OC vs. CM:
- http://www.apait.org/apait/products/professionalliability/faq/claimsmade.aspx
- http://www.piam.com/Insurance_Products/claimsmade.html
- http://www.hutchinsontraylor.com/files/Claims-Made_vs_Occurrence_Liability_Form.pdf
- http://businessinsure.about.com/od/typesofpolicies/f/claimsvocc.htm
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Features to look out for:
- Pure consent to settle - This means that the insurance company cannot settle without your consent. This is important because your reputation is on the line, and if the insurance company settles without your consent, it looks like you admitted fault to what you were being sued for. You have to report settlements and this can lead to future disciplinary action or problems with trying to get insurance coverage in other states if you move.
- Nationwide coverage - It's better to have a company that can move with you if you move to another state, than if you moved to a state that isn't covered. In that case, you'd have to purchase a tail, which can be 150-200% of your annual premium.
- Hammer clause - You don't want this. Basically if you are sued (e.g. a case worth $500,000) and your insurance policy determines it can settle at $50,000... and you end up losing the case, you're not stuck getting hammered with the remaining $450,000 to pay on your own.
- Binding arbitration clause - You don't want this. This prevents you from getting your day in court (which you usually want if you want to prove your innocence). If you and the insurance company can't agree, a third party makes the decision on whether to settle; and once the decision is made, there are no appeals.
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Here are some interesting features to the various plans that a friend of mine and I were looking at. Disclaimer: these are pieces of information not meant to slander or promote any company, but to just provide objective information gathered from speaking to various insurance agents and exploring their websites/flyers/literature/etc.
1) Medical Protective (aka MedPro) - since 1899 - offers both OC and CM
- MedPro's Advocacy for OC Insurance
- Anjali Singh's information on Malpractice Ins (advocacy for OC Insurance)
- http://www.medpro.com/claims-made-vs-occurrence
- Agents are typically super against CM, and are totally for OC policies.
- Insurance premiums (at matured rates ~5 yrs out) are much more expensive (at least 1.5x) compared to others. Premiums soar if you surgically place implants, extract impacted thirds, and work full time at a dental chain like Western Dental, Pacific Dental Services, etc.
- Offers "Stepping into Occurrence" which means you can pay for CM for 3 years and if claims-free, you can get OC.
- Free tail insurance at retirement (no age restriction)
- If you've been sued, depending on what the claim was for, your premium may or may not go up.
- Discounts: Part time counts as <8 hrs clinical dentistry (teaching doesn't count), Risk Management (7.5%), Punjabi Dental Society (10%)
- Includes "Pure consent to settle," "Nationwide coverage," and excludes "Hammer clause," "Binding arbitration clause"
- AM Best Rated: A++
2) TDIC (The Dentists Insurance Company) - since 1980 - offers only CM
- BENEFITS
- Brochure
- Known for being "insurance started by dentists, for dentists" - super friendly and has "great customer service" according to many older colleagues who have used them for years
- Requires tripartite membership: CDA ($690/yr), ADA ($528/yr), local dental society ($variable)
- Insurance premiums (at matured rates ~7 yrs out) are no more than $2500 throughout CA. These include surgically placing implants, and taking out impacted 3rds. Also cover you if you work for a dental chain like Western Dental, Pacific Dental Services, etc. without an increase in premium. Premium includes Dentist's Business Liability (aka "slip and fall insurance"). Policies go from July to July each year.
- You get 10% back from your premium in a check every year.
- Free tail insurance after 3 years of continuous practice up until "life changing event" (i.e. retirement, disability, death, etc.). Maternity leave and simply moving out of state don't count as life changing. No age restriction for retirement.
- Covers you wherever you practice (as long as it's in the U.S.) but officially only covers 10 states: Alaska | Arizona | California | Hawaii | Illinois | Minnesota | Nevada | New Jersey | North Dakota | Pennsylvania
- If you've been sued, premiums won't go up.
- Discounts: Risk Management (5% every two years), New Grad (3 yrs), Part time counts as <20 hrs
- AM Best Rated: A
- Online Application for New Grads: https://www.tdicsolutions.com/Business/ProfessionalLiability/NewGradPLApp.aspx
3) Dentist's Advantage - over 50 yrs - offers both OC and CM
- Doesn't offer "Pure consent to settle"
- Free tail insurance at retirement (not sure if age 50 or 55)
- Discounts: Part time counts as 20 hrs of clinical/teaching/consulting/etc
- AM Best Rated: A
4) Mitchell and Mitchell (aka CNA, Professional Protector Plan) - since 1969 - offers only CM
- CNA's Advocacy for CM Insurance
- First year annual premium for new grads is $50!
- Free tail insurance at retirement (age 55-60), permanent disability, or death (at which point tail would be applied to estate)
- Includes: "Pure consent to settle," "Nationwide coverage," and excludes "Hammer clause"
- AM Best Rated: A
5) Marsh (from Proliability.com, aka Liberty) - since 1871 - offers both OC and CM
- Free tail insurance at retirement (age restriction?), permanent disability, or death - as long as you were with company at least 5 years
- Includes: "Pure consent to settle," and excludes "Hammer clause"
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For those who are curious, I ended up choosing TDIC. I heard a lot of great things about them from dentists who have been around for many years, and the customer service was great. While I'm still not exactly sure if it was the best decision to go with Claims Made, TDIC made an argument that their policies are constantly improving, and not getting worse... so having a CM policy means that your coverage is up-to-date and always fresh. Plus, I don't plan on moving out of the state, since most of my family is in California, so I hope I won't ever need to buy Tail Insurance.
I think if finances weren't an issue at all, it would have been nice to go with MedPro. TDIC is charging me about $58 per month with a New Graduate discount, and MedPro would have been about $270 per month. The fact that MedPro has been established for so long (since 1899!!) is appealing, and also that they're nationwide, so they'll follow you regardless of what state your practicing in. TDIC said they will cover you if you're anywhere in the U.S., but if you're not living in one of their covered 10 states, then you'll need to buy Tail Insurance and find another company.
Once I decided on TDIC, the agent I spoke with sent me a 30-day Binder, with my starting date. This is to tide you over until you get your policy in the mail and are able to pay the first month's premium. The typical coverage is $1M/3M, which means your coverage is $1 million per claim and $3 million per year. Employers will typically ask for this type of coverage or better.
