SADA LEGAL ADVISORY BULLETIN

 

Understanding different professional indemnity options for dentists

 

 

In recent years a number of countries have introduced a statutory requirement that dentists should hold professional indemnity or insurance arrangements to deal with any liabilities arising from their practice.

Although there is currently no such requirement in South Africa, it is absolutely crucial that all practitioners have an indemnity that can protect them against claims.

Professional indemnity should protect you not only for the claim in compensation but should also provide also for the costs and expenses associated with defending/ settling such an allegation.

You need this protection at all times; whilst you practice, when you retire and even after you die, as claims can still be made against your estate for adverse incidents that occurred whilst you were practising.

Claims can come to light a number of years after professional services are rendered, which is why it is important for you (and potentially your estate) to consider your options at the time you purchase professional indemnity. Adult patients can usually bring lodge a negligence claim up to three years after they become aware, or show to have become aware, that they have suffered harm. In the case of children, the limit is usually extended to three years after the age of legal majority (i.e. 18).

There are two different products available for dental professionals and allied healthcare professionals, namely: claims-made indemnity/insurance and occurrence-based indemnity. Your clear understanding of both types of indemnity is essential to making a fully informed decision on which type of indemnity/ insurance to buy. Occurrence-based indemnity is still considered the "gold standard" by indemnity providers and commercial insurers.

When a clinician is protected by occurrence-based indemnity, that clinician can be assured that if they leave clinical practice for any reason, they can still request assistance with any incidents arising out of the clinical practice during their membership period, no matter when that incident, whether it be a complaint, claim or regulatory matter, comes to light. The protection needs only to be in place on the day the treatment was provided.

Claims-made insurance provides a specified level of cover for specified circumstances and for a specified period, usually the duration of the policy. Generally, the policy is purchased on a year-by-year basis and is designed to cover only a proportion of the claims that might arise from each year of the policy. It is for this reason that the policy can be priced lower than an occurrence-based product in the first few years. Claims-made policies are generally favoured by many commercial insurers because they are more predictable.

 

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At the point you stop purchasing claims-made insurance, the insurer's liability stops, unlike an occurrence-based protection which offers indemnity for incidents long into the future. There is also a contractual obligation on the insured to report all adverse incidents to the insurer during the active policy.

What this means is that if you rely on claims-made insurance, you will need to purchase "tail" or "run off" cover in order to give you an extended reporting window which is included and priced in an occurrence-based policy. Insurers are not obliged to offer you run off cover when you end a policy of insurance and the run off cover must give youprovide extended reporting benefits given that claims are still being reported up to 10 years or more after the treatment was provided delivered.

The permissible delay between provision of care and when a claim or complaint is reported is unique to dentistry. It is not unusual for complex implant treatment to fail slowly over many years, and it is often the case that the "post-mortem" after the failure begins to identify failings in the original patient assessment/selection and consent process that means the claim cannot be defended.

The decision to select the correct type of indemnity should not be determined by price alone. Professional Indemnity can protect you against a legal liability to compensate third parties (patients) who have sustained injury, loss, or damage due to your own professional negligence or breach of professional duty in the conduct of your profession or occupation.

The indemnity is usually priced for your own risk and does not normally provide indemnity for the acts and omissions of clinical colleagues who provide clinical services under a contract of employment.

Any dentist, oral therapist or oral hygienist must have their own indemnity whilst employed unless you purchase a group or corporate indemnity which will be priced depending upon the number of dentists, therapists and hygienists you employ.

A failure to ensure that all clinicians employed by you have in place their own indemnity arrangements in place may potentially leave you potentially exposed to a claim for vicarious liability, to which that your own indemnity may not respond to.

The table below illustrates some of the key differences one needs to consider before deciding on the type of indemnity product that suits your needs.