Insurance is an important aspect of protecting a clinician’s assets and reputation, ensuring financial security in case of unexpected events. However, not all clinical malpractice ‘indemnities’ are created equal. In this article from All Med Pro, we will explore the difference between contract insurance policies and discretionary membership organisations, and why contract insurance is considered a more robust protection option.
Contractual insurance policies are legally binding agreements between the insurer and the insured. The insurer is obligated to provide defence and claims coverage in the event of a claim; provided the terms and conditions of the contract are met. On the other hand, organisations such as Medical Defence Organisations (MDOs) provide mainly discretionary indemnity- which means it is at the discretion of their board. They can decide whether to provide coverage and if so, under what terms.
One of the main advantages of contractually certain insurance is the certainty and clarity it provides. The terms and conditions of the contract are agreed upon by both the insurer and the insured, ensuring that there is a clear understanding of the coverage provided. This is particularly important when it comes to assessing the value of the coverage and making sure that the policy meets the specific needs of the individual or organisation.
Another advantage of insurance is that it provides guaranteed legal protection for the insured. In the event of a claim, the insured has a legal right to coverage under the terms of the contract and can take legal action if the insurer fails to provide it. Discretionary indemnity, on the other hand, gives the defence organisation the ability to deny coverage. Medical Defence Organisations don’t have to give their member the rationale behind their declinature. As MDOs are not regulated, or contractually bound, the member also does not have regulatory body or legal recourse to seek damages from. Therefore, it is also important to note that insurance is more regulated than discretionary insurance. This means that the insurer is subject to strict regulations and oversight, which helps to ensure that they are operating in a fair and transparent manner. Discretionary insurance, on the other hand, is not subject to the same level of regulation, which can make it more difficult to hold MDO’s accountable.
The Daily Mail only yesterday published a tragic article highlighting the impact discretionary insurance can have on both dentists and patients.
Clive Worthington from Harlow, Essex, had dental surgery to replace his loosening teeth with eight implants due to issues with his dentures. The dental surgery that Clive underwent led to a host of complications, including infections, difficulty swallowing, and nerve damage, which caused the implants to fall out. These issues ultimately led to the sad event of him taking his own life.
Clive had been awarded £116,000 by the courts but had never received penny due to a detail in the regulation of UK dental insurance. He had flown out to a practice in Hungary owned by Dr Ezster Gombos, who was covered by the Dental Defence Union. This practice ultimately played their discretionary card and left the family with nothing.
Gina, Clive’s daughter had stated. ‘I’m appalled by the way he was let down so badly by the UK dental system, it was horrendous to see him suffer and the hopelessness of trying to get what he had been awarded.
It’s a tragedy that a person would feel driven to take their own life as a result of a lack of support given to dentists from a Medical Defence Organisation.
To read more on this article and the repercussions discretionary Insurance can have, click here: Hidden catch that means you may not get a penny in compensation if your dentist does a botch job | Daily Mail Online.
To conclude, contractually bound insurance is a better option than discretionary defence bodies because it is legally binding, guarantees coverage and provides more certainty and clarity. There is also protection to the consumer as insurance bodies are regulated. When it comes to dental indemnity insurance, it’s important to thoroughly understand the policy and make sure that it meets your specific needs.
Have you previously had discretionary cover with a Medical Defence Organisation?
If you were previously with a Medical Defence Organisation (MDO), The MDO should respond to any claims that occurred during the period you were with them. For the most part, MDOs offer discretionary cover and we are seeing an increasing amount of MDOs use such discretionary powers to refuse claims or provide assistance to members.
If your MDO does not respond (or even no longer exist), you could potentially be left without cover for the period that you were with them. You have a couple of key considerations to make when deciding on cover going forward:
1.Switch to an insurance-backed claims occurrence policy. Many providers will only offer you a retroactive date of inception. This means the policy will only respond to any treatments provided from the inception date (start date of the new policy). In that case, you are still of course relying on the discretionary cover provided previously.
All Med Pro can provide retrospective cover as far back as your graduation if required to cover the discretionary period. It also means no requirement for run-off coverage as there is with claims made cover.
2. Switch to a claims-made policy. Again, many providers will offer you a retroactive date of inception and you will still have the reliance on discretionary cover for the period you were with the MDO.
All Med Pro will be able to extend the retroactive period as far back as graduation. A Claims Made policy covers claims made against you during the policy period. Claims made policies provide no coverage for claims after the policy expires. However, our exclusive policy provides 10 years cover (Extended Reporting Period) in the following examples:
- Death
- Disablement
- Retirement
- Career Break
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