Indemnity beyond September 2020 As the Dental Council is consulting on the arrangements dentists should have in place to protect themselves against claims and cases, Dental Protection discusses the differences between discretionary indemnity and insurance. The relative merits of discretionary indemnity and insurance might not be an issue that dentists spend a lot of time deliberating, particularly at a time when they are working hard to resume patient care as much as possible while sustaining their practice. However, with the Dental Council currently consulting on what arrangements dentists should have in place, some dental professionals have been interested to learn more about indemnity, insurance, and the factors to consider to ensure that they have the right protection for them.
Types of organisation that provide indemnity
Traditionally, the majority of dentists in Ireland have been indemnified by a mutual indemnity organisation. Dental Protection, as part of MPS, has remained a steady and trusted partner for dentists in Ireland for many years, with the assistance and protection provided for members based on mutual discretionary indemnity.
Members of Dental Protection 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, members have a right to request assistance 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 dento-legal consultants and lawyers can then offer the right level of assistance without being restricted by small print, financial caps or exclusion clauses.
This is different to insurance companies, where the dentist has a contract of insurance, which specifies what protection the insurance company will and will not provide, along with details of any exclusions and caps.
I am in the slightly unique position of having worked for both an insurance company and now a discretionary indemnity provider.
I worked for The St Paul International Insurance Company Limited (‘The St Paul’)1 as a dento-legal adviser in the UK from 1999 to 2001. The St Paul saw the clinical indemnity market in the UK as an attractive business, which is how insurance companies as commercial organisations must think, and they provided cover to UK doctors and dentists on a claims-made basis.
For the avoidance of doubt, I have absolutely nothing against insurance companies and, like everyone else, have several insurance policies to cover many of the usual risks in life. However, The St Paul pulled out of the UK indemnity market in 2001 after only two years. This left their insured UK dentists scrambling for indemnity cover and many decided to become members of Dental Protection.
Reliability, responsiveness and quality
The first consideration for many is whether protection will be available when you need it. Members of Dental Protection are part of an organisation, the default position of which is to always consider how they can help to protect you. Dental Protection has been operating in Ireland for over 100 years, and in the past 12 months has said yes to 100% of requests for assistance from dental professionals in Ireland that met the basic qualifying criteria. The organisation has been there for members on each occasion – provided the individual was a member at the time of the incident, indemnified for the type of work or procedures that were the subject of the complaint or claim, and the request was within the scope of the benefits of membership.
By way of contrast, an insurance contract clearly specifies when the insurance company will step in to support and when it will not. It is important to check the fine print of some insurance policies and consider whether there are financial limits, or caps, imposed. For example, a Dental Council fitness to practise investigation can easily cost in excess of €50,000 in legal fees, depending on the nature of the case. Some insurers have financial limits on such legal costs as well as imposing significant excesses, which could mean that an individual has to fund some of their own legal costs or risk being unrepresented before the regulator, which is obviously far from ideal. The experience of Dental Protection is that those who have representation before professional regulators obtain better outcomes than those who do not.2 It is in your best interests to check the extent to which your provider will help with matters such as complaints or disciplinary procedures.
A further consideration is whether your protection will be responsive to your needs. Discretionary indemnity has always been considered more flexible and responsive, since the scope of assistance offered to the member can be wider than the precise policy wording of contractual insurance. Discretionary indemnity allows Dental Protection to respond to changes in the dentolegal environment and assist members with emerging risks that may not have been foreseen at the time membership was taken out. This is especially important when new challenges arise, as has been the case during this pandemic. Dentists also need to be assured of the quality of the support they will receive. Dental Protection has a long history of providing an excellent quality of service to members, with experienced dento-legal consultants and lawyers available to advise, guide and support members when they are facing the most stressful situations in their professional lives. Not all indemnity providers provide the same level of service and assistance, and no other organisation has our experience in managing dental claims. Dental Protection has the largest team of experienced dento-legal consultants of any indemnity provider in Ireland, and indeed internationally, and a member can speak with a dento-legal consultant whenever they need to. Our legal and professional expertise can ensure that your issues are resolved as quickly as possible, with the least upheaval and impact on your career and professional reputation.
Financial strength and longevity
It is, of course, vital that an indemnifier is in a strong financial position and has a long-term commitment to protecting members. The good news for Dental Protection members is that MPS is in a strong position to provide financial security.3 Data published by Dental Protection4 revealed that almost 40% of its estimated annual claims costs in the UK in 2018 related to cases where treatment started ten or more years before the claim was made. Claims are increasingly being made in the UK for larger amounts, often in excess of £100K. In general terms, in Ireland, the amount of damages awarded to patients is much higher than comparable awards in the UK. Therefore, for an indemnifier, both financial security and longevity are vital, so it is important to consider how likely it is that your indemnity provider will be here for you for the long term.
Who takes the risk – you or the indemnity provider?
Dentists need to understand whether their protection is ‘occurrence based’ or ‘claims made’, and what extra steps you might need to take if you opt 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 in perhaps 10, 15 or 25 years’ time.
With claims-made insurance, the extent to which risk is carried into the future depends on whether the dental professional can secure run-off or ‘tail’ cover when they end their policy or membership, retire or leave the profession. Therefore, claims-made policies do not need this element of future risk priced into their premiums, which is why they may appear more affordable in the short term.
If not offered or able to purchase the necessary run-off cover, an individual with a claims-made policy has no protection in place if a claim later arises, and the incident that gave rise to the claim was not reported in accordance with the terms of the policy. The individual would only be covered if they have separately purchased another insurance policy with a retroactive date spanning that time frame.
With occurrence-based indemnity, any incident that arises from the time they are with their indemnity provider – even if the claim is raised years later – is indemnified in perpetuity. Claims against dentists are arising in the UK 15 or even 20 years after the clinical care was provided and the same could happen in Ireland in future. A run-off period of any less than these time frames will not protect a dentist in the event of a clinical negligence claim being made many years in the future. It should also be noted that there is often a need with claims-made insurance for ‘incidents’ to be reported within specific time frames, but what constitutes an ‘incident’ can be open to interpretation in dental claims.
For all of these reasons, many dentists prefer the occurrence-based indemnity that Dental Protection currently provides.
With dentists facing significant financial pressures due to Covid-19, Dental Protection has recently been able to pay the equivalent of two months’ subscription fees back to members, as well as enabling members to adapt their membership to reflect the changing level of work they are doing. It is unclear whether insurance companies, due to the contractual and capital restrictions in place that form their relationship with dentists, could be as supportive or flexible. Where others may only provide help with claims, we offer far more – including assistance with dento-legal and ethical advice, patient complaints, disciplinary procedures, inquests, regulatory matters and media advice.
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. Dental Protection would be more than happy to answer any questions you might have that are not addressed in this article.
1. The St Paul merged with Travelers in 2004 – www.travelers.co.uk/about-us/history. Accessed August 25, 2020.
2. www.dentalprotection.org/uk/articles/dentists-without-legal-representation-face-tougher-sanctions-at-gdc-hearings. Accessed August 24, 2020.
3. The Medical Protection Society Limited, Made for Members – Annual Report and Financial Statements 2019. Available from: mpscdnuks.azureedge.net/resources/docs/mp/financial-information/annual-report-2019-web.pdf.
4. www.dentalprotection.org/uk/articles/40-percent-of-claims-costs-relate-to-treatment-started-over-ten-years-ago. Accessed August 24, 2020.