Part 1: Protecting yourself
Stacey L. Simmons, DDS
Case No. 1
Awhile back, I was leaving town for the weekend and realized I had forgotten something at home, so I left to get it on my lunch break. As I was turning the corner off the main road, I was stupidly distracted and accidently hit another car. Long story short, there was very little damage to the other car but the driver did receive a slight bump to her head. Protocol dictated that she go to the hospital for an assessment and was subsequently cleared without incident. Since it was my fault, my insurance covered everything (she did not have insurance), and I assumed that was the end of it.
Four weeks later, I received a notice in the mail from my insurance company wanting permission to release my insurance limits to an attorney-not just any attorney, but the attorney on the back of the phone book. Interestingly enough, the individual I hit was unemployed and on Medicaid. She apparently found out what I did for a living, and suddenly I became a target for her to obtain a financial gain from the incident.
Case No. 2
We all have patients who are a challenge to render care to; no matter what you do, they are not pleased. It seems that a patient's dissatisfaction with a dentist's services led to her (the patient) filing a complaint with the state licensing board with the intent of having the dentist's license suspended or even revoked. There was also a threat of a malpractice lawsuit. Fortunately, in the end, diligent recordkeeping and use of an attorney enlisted by the dentist's malpractice insurance ruled in favor of the dentist.
Case No. 3
Day-to-day tasks and activities may seem simple and almost mundane; we go about them without even thinking. That was the case for this dentist who was riding her mountain bike on a trail she had been on several times. As luck would have it, she hit some rocks just right while going down a steep section of the trail and she somersaulted over her handlebars. The accident left her with a severely dislocated right shoulder, jammed and hairline-fractured fingers, and a crack in her helmet. The shoulder sling and splints on her right hand (working hand!) hindered her ability to work at full potential for at least two to three weeks.
All of the above stories are true and, after reading them, these are the thoughts that likely crossed your mind:
1. Those types of things will never happen to me.
2. Good thing those dentists had some kind of insurance; if they didn't, that's crazy.
3. I wonder if I am protected like I need to be.
If we could control every aspect of our lives, we would not need what many call the necessary evil-insurance. My eyes roll into the back of my head when I think about the insurance that I carry for the property of my business, the workings of my actual dental practice, disability and malpractice, life and homeownership ... and let's not forget the umbrella policies that can be put in place to help cover above and beyond everything else that's in place. It's an investment, but how can you make sense of it all, and what are the policies that you really need?
Every insurance agent will tell you that you need to buy this insurance for that possibility, etc. While every practicing dentist has his or her unique situation, there are general guidelines that you can follow to ensure that your basics are covered. The intent of this article is to get you to think about your particular situation and ask the right questions. If you are a newly graduated dentist, you need to be able to get the insurance you need. If you have been practicing awhile, you can inventory your current coverage and make any necessary additions or changes. Why? Because what you had in place two, five, or even 20 years ago may not be applicable to your circumstances today.
Disability insurance
1.Disability insurance is a must. This type of insurance will protect you and your ability to provide an income should the need arise if an injury or sickness occurs.
2.Disability insurance is the most arduous insurance to get because it's based on your health and the type of risk you are to the insurance company. You should apply for this insurance when you are young and healthy because it is a medically underwritten policy; submission of past medical records is mandatory. With that being said, binding a policy under the "sooner than later" implication is encouraged, regardless of when you started practicing. Depending on their assessment, there may be exclusions or limitations built within your policy. Know what they are and understand them. Some of the most common disability claims in dentistry are from chronic back, neck, and shoulder pains as well as repetitive movement complications.
3.Regardless of when you apply, you need to be diligent and involved in the underwriting process. Case in point: When I was pregnant with my second son, I applied for disability insurance. The company wanted to increase my rates because (1.) I had a cesarean for my first delivery and, (2.) My cholesterol levels were slightly elevated due to the pregnancy hormones (they were still within normal limits). Despite the fact that a letter from my obstetrician indicated that my pregnancy and health were excellent, the insurance company did not consider my health good enough to offer me the highest and best policy available because I was a "risk," so I filed a complaint. Shortly thereafter, I received notice that my application had not only been approved, but I had been granted the best rates and policy available.
4.Our roles as dentists are irreplaceable, and because of this, it would be wise to investigate the different types of disability insurances available. For example, an "Own Occupational Policy," will cover your principal duties that you have been trained to perform on a day-to-day/week-to-week basis. If a claim is made, you will be analyzed to assess the extent to which you can perform your duties that will categorize you as fully or partially disabled. For example, if you become disabled and are unable to prep teeth or do surgeries but can still do exams, you may not be eligible to get the full amount of disability insurance because you are considered to be partially disabled. Some insurance companies offer a "Modified Own Occupational Policy" or a "Medical Occupational Policy." With these policies, if you are unable to perform the duties that provide you with the majority or even part of your income, you may be eligible to still receive a full monthly disability benefit. These policies are designed specifically for physicians and dentists. I would highly recommend looking into the type of disability policy that you have or plan on getting. Understand the limits and definitions in their entirety. These details will bind you in the event a claim is made!
5.The rule of thumb is that you should procure as much insurance as possible (depending on need and budget). The industry as a whole sets a ceiling amount, which is typically 60% to 75% of your monthly income. With that being said, the average available maximum is anywhere between $15,000 to $20,000 per month. Additionally, it is important to protect your insurability by considering purchasing an "additional purchase benefit." This allows you to purchase more disability insurance in the future, regardless of your health, as long as your income will support the higher benefit amount.
6.Make sure you add an indexing option to your policy to keep up with inflation. If a person were to have a 20- to 30-year disability, his or her benefit could triple with this option.
7.Lastly, know and understand the terms, limitations, and spelled-out benefits of your insurance policy.
Malpractice insurance
1. There are two basic types of malpractice/liability insurance-claims made and occurrence. Knowing the difference between the two will have a tremendous impact, especially in the event that there is a claim made against you.
2. A claims-made policy will cover claims made against you only while the policy is in effect; in other words, the insured is covered only during the policy period as long as the premiums are being paid. In the event that you, the insured, leave a position (retirement, go to another practice, etc.), or if you move to another state that will not cover your practice from the prior state, claims can still be made against you. You will NOT be covered unless you purchase an optional "extended reporting period," also known as a tail policy, which can be acquired for a number of years following the policy cancellation. Ask if a tail benefit is included within your policy. If it isn't, it is recommended you purchase it after the policy is terminated. This type of policy is typically less expensive than an occurrence policy.
3. An occurrence policy provides coverage for incidents or claims that occurred during the time a service was rendered, regardless of whether or not your policy has been cancelled or expired. For example, if a claim is made against you in 2015 based on treatment rendered in 2013 (and you had cancelled or terminated your policy), your occurrence policy will respond according to the limits, terms, and conditions of the policy during that period of time.
4. Know the strength of your insurance company and examine the claims department; the company should be well versed with claims in the dental industry. Furthermore, inquire into the company's rating and assets to ensure your coverage and financial security. Your representing insurance agent should be well versed in his or her liability knowledge and policy provisions.
5. You have a policy in place, but do you understand what the coverage limits mean? Most policies are written like this: $1 million/$3 million or $2 million/$3 million or some other combination of coverage. The first number represents the amount of coverage for each occurrence, and the second number indicates the annual aggregate amount. Translation: A provider who has a $2million/$3million policy would have up to $1 million to cover a specific incident in a year and a total of $3 million for all claims during that same period of time. If you are a new dentist, typically your coverage will be less, and as you accumulate wealth and value in your practice, you will need to adjust and increase your limits.
6. As strange as it may sound, some areas are more litigious than others, so you must take that into consideration when deciding on the type and amount of policy you will be purchasing.
Purchasing disability and malpractice insurance is a contract between you and the insurance company. Understand the terms and read the fine print. If you don't understand what is written, ask. I would furthermore recommend yearly meetings with your insurance agent(s). Document and record changes that take place with these policies, and don't be negligent in assessing your evolving needs and how these policies will work for you in the unfortunate event they have to be put into action.
Next month, in Part 2 of this series, we will assess overhead disability and life insurance, umbrella policies, and the insurance needs for your practice entity, building, and property.
Stacey L. Simmons, DDS, is in private practice in Hamilton, Montana. She is a guest lecturer at the University of Montana and is a contributing author for DentistryIQ, Surgical-Restorative Resource, and Dental Economics. She can be reached at [email protected]
