Malpractice Insurance By Elizabeth Kincaid, Esq.

It’s really not a question of “Do I need malpractice insurance?” It’s a matter of how much coverage – the limits of liability – you need. Malpractice-insurance policies offer a wide range of limits for both single claims and annual overall total limits. Determining the “correct” level of coverage is an important part of your decision in purchasing malpractice insurance to protect your practice and assets.

Insurance carriers offer limits of liability – the amount of coverage available — within a fairly wide range. An example of limits of liability is $100,000/$300,000. The first number refers to the coverage limit for a single claim. The second number is the aggregate amount of coverage during a policy year.

When evaluating how much coverage you need, consult with your accountant, lawyer, or another business advisor. There is no set formula to use. One of the most important considerations; however, is the amount of coverage that will be adequate to protect your patient in the unfortunate event of an injury. This is a primary consideration for coverage.

But to begin with, you should calculate the full value of your practice, not just at the very beginning, but what it’s likely to be worth even a year or two down the road. You’ll want to factor in the value of your office (if you own it), your equipment, goodwill, your staff, and the annual revenue that your practice generates.

Other factors to consider: The amount of coverage required by managed-care networks you affiliate with; state statutes that require coverage and/or coverage minimums; an employer who may require similar policy limits for everyone in the office, and so on.

You should also take into consideration the fact that today, verdicts running in the thousands of dollars can be quite commonplace in malpractice cases.

Elizabeth Kincaid, Esq., is the chief operating officer of NCMIC Insurance Company, which offers professional liability insurance to dentists through NCMIC Dental Solutions.sm She earned a Juris Doctorate (J.D.) with distinction from the University of Iowa Law School. Kincaid may be reached at (800) 769-2000 ext. 342.