Content Dam Diq Online Articles 2017 07 Insurance 1

Do dentists work in a legal minefield? How to manage your risk

July 3, 2017
No dentists set out to be sued, or get into any other type of legal troubles. Protection is extremely helpful and important. What can you do to maneuver your dental practice through the legal minefields?

No dentists set out to be sued, or get into any other type of legal troubles. Protection is extremely helpful and important. What can you do to maneuver your dental practice through the legal minefields?

In a 2004 article, Crystal Baxter, DMD, provided a detailed explanation of the different types of dental negligence claims a practice might receive. Dr. Baxter has been called on to review hundreds of dental negligence cases over the years as a practicing dentist. As she explained, in many of those cases patients attribute the negligence to medical malpractice. While Dr. Baxter’s goal was simply to educate dental practitioners on the types of procedures where these claims might arise, her message was clear—dentistry can be a bit of a legal minefield.

Due to the chances of medical malpractice claims and several other potential business risks, there should be several insurances involved when launching and growing your dental practice.

Commercial property insurance
One of the most common concerns when starting your dental practice is how to cover your property and equipment. Dental equipment must be purchased before opening your doors to patients. That equipment usually comes with a steep price, which makes it highly valuable. According to Mustafa Shah Khan, DDS, the cost of starting a new practice is often upwards of $500,000. Much of that cost is tied into the physical property and equipment.

Protecting your valuable business investments may require you to purchase commercial property insurance immediately after starting your business and before opening for your first patient. Even during the launch phase, the unexpected can occur—floods, fires, even theft. Given the tenuous financial ground of starting a practice, protecting against the unknown risks to property is very important.

Workers’ compensation
Do you know the workers’ compensation rules in your state? They vary from state to state, but usually require a business to purchase workers’ compensation once it hits a minimum number of employees. At times that minimum can be extremely low, triggering even if you employ just one person in your practice.

Workers’ compensation is often viewed negatively by employers but is usually more a benefit than a hindrance. A claim from an injured employee can cost your practice tens of thousands of dollars, not to mention the cost to you when an employee is out of work for a long time. Purchasing workers’ compensation is a also a legal requirement in many states. Failure to purchase legally-required insurance can cost your practice thousands of dollars. It’s important to increase the amount of workers’ compensation coverage you provide to your employees as your practice grows.

General liability
Given you will have clients coming in and out of your office, it’s important to consider the potential for third-party claims. What happens if a patient is accidentally injured on your property, but in a manner that is unrelated to a medical procedure? Your business may be held liable, and a medical malpractice policy certainly won’t cover it.

General liability exists for the unknown risks that can occur as you have people moving throughout your office. A client left alone for a few minutes might be injured by equipment left out in the room, for example. A slippery floor in a room or bathroom could result in a slip-and-fall incident.

General liability is a sort of “catch-all” for businesses that come face-to-face with customers on a regular basis. The more your practice grows, the more risk you’ll incur and the more likely it becomes that someone will receive an injury in your office. General liability is not required, but the risks are enough to make it strongly recommended.

Medical malpractice
You’ll be hard pressed to find any type of medical practice that doesn’t have medical malpractice insurance. Simply put, medical malpractice claims are common enough that most practitioners receive several over the course of their careers. According to data from theNational Practitioner Data Bank, between 2006 to 2016, of the 19,755 practicing dentists, 16,337 medical malpractice payments were made. Although the data does not say how many of the practicing dentists had to make payments, the number of settlement payments was high enough to ensure that, on average, 82% of dentists would have had to make at least one payment during that 10-year period.

Although the majority of those settlements were small (under $50), some were extremely costly, in the range of several thousand dollars. Even when no compensation is necessary, without medical malpractice insurance your practice will have to pay out of pocket to defend the case. Medical malpractice insurance can cover the cost of both legal defense and potential settlements.

Finally, there’s a good chance that your state may mandate that you purchase medical malpractice insurance. Without even considering the risks, such as workers' compensation, purchasing this type of insurance might be a legal requirement that could come with fines should you fail to buy it.

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Maxine Rieman’s focus has been on educating and assisting shoppers about financial products. This led her to CoverWallet, a startup dedicated to simplifying insurance for small businesses. She previously launched the personal insurance team at NerdWallet, and helped create an innovative brokerage comparison product. For more information, visit