By Dr James Foster, Deputy Dental Director, Dental Protection

The relative merits of discretionary indemnity compared with insurance might not be an issue that dentists spend most of their time thinking about, particularly during these challenging times.

However, with professional overheads increasing, some dental professionals have been looking at alternative or cheaper products to save money. In most cases, cost comparisons are misleading, because no two solutions are the same. If the cost of your professional protection is your only concern, then there is no need to read on. But if you want to understand why the products differ in cost, and the benefits they deliver, the following information may make the difference between a lifetime of professional protection and a lifetime of regret.

The types of organisations that offer indemnity

Traditionally, most dentists in Asia (Hong Kong, Singapore and Malaysia) have been indemnified by a mutual indemnity organisation.

In the example of Dental Protection, our members are part of a mutual organisation that they collectively own. Members pay subscriptions that go into a central pool. If they face a complaint, claim, regulatory investigation, or any other matter arising from their professional practice, members have a right to request assistance paid from this central pool.

As the organisation is owned by members, the default position is to see how the member seeking assistance can be helped.

Once a request for assistance is approved, an experienced team of dentolegal consultants, case managers, and a panel lawyer will then provide the right level of assistance, without being restricted by small print or financial caps. 

Often, one of the key differentiators between the protection we provide, and alternative contract-based insurance products, is the ability to flexibly use discretionary indemnity to proactively assist members.

While most patients might prefer to avoid litigation, if an insurance contract lacks flexibility, and will only assist if the matter proceeds to litigation, you might either have to use your own money, or sit on your hands until the matter proceeds to formal litigation and a Letter of Claim arrives at the door. 

Of course, the dentolegal risks faced by dental professionals are not limited to litigation. Through the course of your career, you could be faced with complaints to your practice, or hospital, regulatory investigations, inquests, or in the worst-case scenario, criminal charges arising from your professional practice. We help many members in a variety of ways including advice to manage certain clinical scenarios, drafting responses to complaints, and intervening early to prevent unnecessary developments, which may include arranging for remedial treatment to be carried out by a different practitioner or specialist.  

As a discretionary indemnity provider, Dental Protection allows members to seek assistance for such matters. For dentists relying on contractual insurance, it is vital they carefully read the policy wording and any policy schedules to ensure there is full understanding of what is covered, and what is not.

Reliability

Another consideration for many dentists is whether protection will be available when they need it.

There is sometimes a belief expressed that a discretionary indemnifier can refuse or even withdraw assistance on a whim. This is not correct. Discretionary indemnity organisations must follow the law around how discretion is exercised, to ensure they are fair, and consistent in their dealings. Dental defence organisations are also governed by their Articles of Association, which form a contract between the organisation and the member.

There are very few occasions where we have to decline requests for assistance. These situations might arise where a member was not in membership at the time of the incident, or not indemnified for the type of work or procedures that are the subject of a complaint or claim, or the request for assistance related to matters considered outside the scope of benefits of membership.

By way of contrast, an insurance contract clearly specifies when the insurance company will step in to support and when it won’t. It is important to check the fine print and consider whether there are financial limits imposed. If damages are awarded that exceed a cap, this would leave a dentist personally liable.

Some insurers also have financial limits on legal costs, as well as significant excesses, each of which could mean an individual has to fund some of their own legal costs, or risk being unrepresented before the regulator.

In our experience, those who have legal representation before professional regulators obtain better outcomes than those who do not. 

Managing members with multiple cases

We exist purely for the benefit of our members and recognise that risk is an inevitable part of any dentists career.

Occasionally, some dentists experience higher risks than their colleagues who work in the same area of practice. In these circumstances, our approach to managing risk is to carefully balance the needs of the individual member with those of the wider membership.

We are well aware of the potential impact on a member’s career if they are deemed a significant risk. 

We aim to indicate the nature of our concerns to individual members and will try and work with them early to reduce their risk.

At the same time, we believe that the interests of the majority of members should not be compromised by a small minority who have received a comparatively high volume of claims or other significant matters.

Where a member’s risk profile sits far outside their peers, we may consider raising their membership subscription in line with their risk.

Only in exceptional cases, where a member’s case history is far outside the norm of their peers, will we consider terminating or declining to renew membership.

We recognise the potential impact of this decision, and it is made with significant scrutiny and consideration by fellow dental professionals.

Who takes the risk – the dentist or the indemnity provider?

Finally, another key point of difference for dentists to consider, is whether their protection is ‘occurrence based’ or ‘claims made’, and what extra steps they might need to take if opting for the latter.

Both the subscription charged by mutual organisations and the premiums charged by insurance companies are analysed and decided upon by actuaries, based on the risk to the mutual fund or reserves of the organisation concerned.

With occurrence-based indemnity, the responsibility for any future risk lies with the indemnity provider who ensures that the subscriptions collected today are sufficient to ensure that the organisation will be there when needed, to help members many years into the future. This right to request assistance applies even if the member has left membership or retired from practice provided the complaint or claim relates to a time when they were in membership.

With claims-made insurance, the extent to which risk is carried into the future depends on whether the dental professional has run-off or ‘tail’ cover when they end their policy or membership, retire, or leave the profession. Whilst some products may include an amount of run-off protection at retirement, the options may vary in terms of the amount of run-off protection and additional costs. It is therefore important to consider what additional costs may be incurred to obtain and maintain run-off cover for years after retirement.

It is unusual for run-off protection to be provided when just moving to another insurer – at this point, the risk for any claims transfers to the new provider. Therefore, claims-made policies do not need price to include future risk priced into their premiums, which is why they may appear more affordable in the short term.

If an individual with a claims-made product does not secure run-off cover when they cease practice or retire, the dentist has no protection in place if a claim later arises and the incident that gave rise to the claim was not reported within the terms of the policy.

Depending upon the terms of the claims-made policy, an individual would only be covered if an incident or potential claim was reported whilst the dentist had the claims-made insurance in place to cover that period and had complied with the policy terms at the time. On retirement, a dentist would need to have and comply with the terms of any run-off product. This can be complicated and an individual really needs to fully understand the type and nature of the indemnity that they have in place and be confident that it is sufficient for their needs, which becomes all the more critical at a time of retirement from practice.

With occurrence-based indemnity, any incident that arises from the time a dental practitioner is with their indemnity provider— even if the claim is raised years later such as during your retirement. We are seeing claims against dentists in Hong Kong arising seven or more years after the clinical care was provided. The delay represents the time frame attached to more complex restorative treatments failing, or can simply reflect the delay in a patient become aware of a problem. A run-off period of any less than these timeframes will not protect a dentist in the event of a clinical negligence claim being made many years in the future. Another important aspect to consider in most, if not all, claims-made policies is the "Incident Reporting" requirement. This condition requires the dentist to report facts or circumstances of an adverse incident that might give rise to a claim in the future, and to do so within a prescribed period of time in order for the claim to be valid under the terms of the policy.

Ultimately, the decision on whether to choose discretionary indemnity or insurance, occurrence-based or claims-made protection, rests on your individual circumstances. The indemnity provider or insurer that you opt for should be able to explain how they will protect you. 

¹ Dentists without legal representation face tougher sanctions at GDC hearings