When exploring the purchase of malpractice insurance, new dentists should understand that the policy isn’t just about the price, it’s a promise — and it can affect your entire career. You may often hear about the opportunity to get your first policy for “free,” and while it may sound appealing, it’s important to look past the price tag to uncover the value of what you’re actually getting. Here are five things to think about before factoring in the cost of your malpractice policy.
1. Length of policy
In many cases, free first-year malpractice policies are tied to a larger, “master” policy and are all required to have the same start and end date, regardless of your actual first day of practice.
For example, let’s say the free policy begins in May and expires May of the following year. You graduate dental school in June and start your first day of work in July. Essentially, your malpractice insurance has been active for two months, even though you haven’t started practicing, and will expire 10 months later, before you’ve even practiced for a full year.
That means you have to buy your second year of insurance earlier and may pay more during your first year in practice on this “free” policy. Look for a first-year policy that starts the same day you do. This way, you can get the first-year deals for your entire first year of practice and avoid paying second-year rates before you need to.
2. Amount of coverage
Oftentimes, free first-year malpractice policies have a standard set of limits that cannot be changed, such as $1 million per claim/$3 million aggregate. Policy limits dictate the maximum amount of money your insurance company will pay on your behalf. The first number reflects what the insurance company will pay per claim. The second number is the aggregate limit that the company will pay if there are multiple claims in the same policy period.
While limits of $1 million/$3 million may be suitable for some dentists, they may not be the best fit for everyone’s needs. The procedures you perform, practice location and overall scope of practice are just a few reasons why the decision regarding the amount of coverage in your malpractice policy should be in your control.
Rather than being added to a policy with limit restrictions, look for a policy and company that would allow you to select the coverage amount you want. For example, with MedPro’s first-year policy, you can choose any set of limits for no additional charge.
3. Policy type
Are you being offered Occurrence or Claims-made coverage? Each policy type has unique benefits, and it’s important to understand the difference so you can choose the one that best fits your career plans. A Claims-made policy may be less expensive to start but may cost you thousands of dollars down the road if you have to buy tail coverage.
4. Tail coverage
If the policy is Claims-made, you may need to purchase tail coverage if the policy is cancelled. Tail coverage can cost up to 160–290% of your undiscounted annual Claims-made premium. For example, if your undiscounted annual Claims-made premium was $2,500, your tail coverage could cost anywhere between $4,000 and $7,250. If you’ll be required to purchase tail coverage, you need to plan ahead and budget accordingly.
5. Carrier advantages
Make sure you find a carrier with a high A.M. Best financial strength rating and a proven record of winning claims. Don’t make your choice on price alone. Look for a financially strong company that will defend your practice, reputation and assets when the time comes.
As a new dentist, you’ll make a lot of important decisions on how to protect your future. MedPro Group can help make your malpractice insurance easy and affordable. Our A++ A.M. Best rating, 95% national dental trial win rate and pure consent to settle provision shows that you’ll be well-protected. With your exclusive ASDA discount, your first policy with MedPro Group could be as low as $50 for your entire first year in practice.
Whether you’re a student, resident or new graduate, congratulations on being another step closer to accomplishing your dreams. We’re excited to see what the next chapter holds and are always here if you have any questions along the way. Call 800-4MEDPRO ext. 119660 or visit us online to learn more.
A.M. Best rating as of 7/11/2018. All data is MedPro Group data; claims data range is 2013-2017. Must qualify for new-to-practice and ASDA discount for $50 policy. Other credits and debits may apply. MedPro Group is the marketing name used to refer to the insurance operations of The Medical Protective Company, Princeton Insurance Company, PLICO, Inc. and MedPro RRG Risk Retention Group. All insurance products are administered by MedPro Group and underwritten by these and other Berkshire Hathaway affiliates, including National Fire & Marine Insurance Company. Product availability is based upon business and/or regulatory approval and may differ between companies. ©2019 MedPro Group Inc. All Rights Reserved.