Claims-Made vs. Occurrence Dental Professional Liability policies: What’s the difference, and why does it matter?

JUNE 27, 2024

The critical role of dental professional liability insurance in safeguarding dental practitioners against potential risks and claims is multifaceted and vital for the stability and integrity of any dental practice. Understanding the types of policies, particularly the differences inherent in claims-made versus occurrence policies, can help dental professionals select the insurance product that meets their risk profile.

When evaluating your practice’s professional liability coverage, it is important to know that you have multiple options. Understanding the differences in policies is crucial to insuring your practice appropriately.

Claims-Made Policies

A claims-made dental professional liability policy is a type of insurance that provides coverage for claims, arising from negligence in the performance of dental services, which are made against the insured during the policy period.

Claims-made policy premiums increase over a period of five years via “step” increments, offering a lower policy premium in the first four years with premium leveling at years five and beyond. Upon cancellation of the claims-made policy, it is necessary to purchase “tail coverage” or an extended reporting period endorsement. Such endorsement is necessary to cover claims between the retroactive date and the cancellation date.

Pros:

  • Claims-made coverage is readily available in the market.
  • First-year claims-made policy premiums are a small fraction of an occurrence or mature claims-made policy.

Cons:

  • Cost of extended reporting period endorsement can be 150% of the claims-made mature policy, or higher. Note that select carriers offer earned extended reporting period endorsements when certain criteria are met.

Occurrence Policies

Alternatively, professional liability may be purchased on an occurrence basis, which covers incidents that occur during the policy period, regardless of when the claim is actually reported.

Pros:

  • Occurrence policies tend to offer stable, predictable premiums.
  • No requirement for reporting endorsement; occurrence policies respond to claims reported during the policy period.

Cons:

  • Cost of initial premiums are higher than first year claims-made premiums.

Equipping Dental Professionals with Comprehensive Insurance Solutions

Examining your business risks and implementing a risk management plan is vital to protecting your professional reputation and financial assets. The Safehold Dentist Professional Plus Program offers a specialized suite of coverage options for dentists, endodontists, orthodontists, oral and maxillofacial surgeons, pediatric dentists, periodontists, prosthodontists, and other dental professionals.

With over 100 years of combined experience, our knowledgeable team will customize a comprehensive package of professional liability and commercial insurance for your dental practice. We are here to understand your risk and develop solutions to meet your insurance needs.

Learn more

To learn more about the program and to request coverage, visit us at Dentist Professional Plus.

This material is provided for informational purposes only based on our understanding of applicable guidance in effect at the time of publication and should not be construed as being tax or legal advice. Customers and other interested parties must consult and rely solely upon their own independent professional advisors regarding their particular situation and concepts presented here. Although care has been taken in preparing and presenting this material accurately, Safehold Special Risk disclaims any express or implied warranty to the accuracy of the material contained herein and any liability with respect to it, and any responsibility to update this material for subsequent developments.

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