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It’s easy for dental professionals to feel overwhelmed by the jargon and conflicting advice surrounding dental malpractice insurance. In particular, there’s confusion and misinformation regarding the terms “claims-made” and “occurrence.” Which policy language will best meet your needs?
Both claims-made and occurrence coverage have their pros and cons. While some people may swear by one over the other, they're relatively equal. Depending on your role and future plans, one form may be more beneficial to you than the other. A practice owner has different insurance needs than an independent contractor working at multiple locations.
The key to wading through the varying opinions on claims-made versus occurrence is understanding how each form works. Consider factors such as your practice type, career stage, and risk tolerance. Choose the one that best aligns with your specific needs so you can stay protected from malpractice claims.
Here’s a brief overview of the two forms, which highlights the benefits and risks of each, so you can determine the best fit for your situation.
Occurrence form coverage is professional liability insurance that triggers coverage based on the “incident date.”
Example: Suppose a dentist provides treatment in May 2024, and the patient files a lawsuit in 2026. The dentist would file the claim against the occurrence policy that was in force in May 2024.
An occurrence policy tends to be attractive for the following groups:
Dental professionals choose occurrence form coverage for the following reasons:
Though occurrence form policies are more expensive, many dental professionals find the peace of mind, simplicity, and flexibility are worth the extra cost.
Anyone considering occurrence coverage needs to understand the policy’s potential drawbacks:
A claims-made form is a professional liability policy that triggers coverage based on the “claim reporting date.”
Example: A dentist had a claims-made policy for calendar year 2023 but decided to change insurance companies on January 1, 2024. In May 2024, a patient files a malpractice lawsuit for a 2023 procedure. The dentist would file the claim against the claims-made policy that is in force in May 2024 — the currently active policy — if that policy includes tail coverage.
Tail coverage supplements claims-made policies and protects you from allegations of malpractice related to incidents that occurred in prior years but did not come to light until later. The tail forms automatically as policy terms renew and accrue.
Claims-made policies are often recommended for practice owners, due to their long-term cost-effectiveness and flexibility. If you’re not planning on making big changes in your career or location, a claims-made policy may be right for you.
By maintaining the same policy over time, practice owners can benefit from potential savings on premiums.
Dental professionals choose claims-made coverage for the following reasons:
Note: Cancellation is unlikely to happen without your knowledge. In addition to sending a bill, all insurance companies are required to send a “notice of cancellation” letter by certified mail before canceling a policy. If you delegate insurance premium payments to an office manager or someone else, mark your calendar to double-check the payment status before each renewal date.
So, which is better: claims-made or occurrence? It depends on your situation. If you're a seasoned dentist and long-term practice owner with a clear career path, a claims-made policy might be the way to go. It's generally less expensive in the long run and offers flexibility. If you're still in transition, an occurrence policy can provide peace of mind with its continuous coverage and simplified approach.
The bottom line: Don't just opt for whatever insurance the dentist next door has. Consult with an experienced insurance advisor who can evaluate your specific needs and recommend the best coverage for your unique situation.
Understanding the differences between claims-made and occurrence policies is the first step towards making informed decisions that will protect your dental license and practice for years to come.
Whether you're a dental student or managing a large dental practice chain, Risk Strategies provides expert guidance, along with insurance and risk management solutions tailored for dental professionals.
The contents of this article are for general informational purposes only and Risk Strategies Company makes no representation or warranty of any kind, express or implied, regarding the accuracy or completeness of any information contained herein. Any recommendations contained herein are intended to provide insight based on currently available information for consideration and should be vetted against applicable legal and business needs before application to a specific client.