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What is the purpose of malpractice insurance?

What is the purpose of malpractice insurance@3x-100What is the purpose of malpractice insurance? 

Malpractice insurance, or dental indemnity, is a pool of funds that are available to cover the costs of defending and damages payable for a claim that a patient was injured from negligent practice. 

However, not all adverse outcomes or injuries to patients are necessarily negligent. 

In fact, a successful claim must have two key components:

1: Breach of duty. A breach of duty is conduct that is judged as failing the standards of your profession by your peers. This was initially determined by the Bolam Test. 

This test was established in the Bolam v Friern Hospital Management Committee case of 1957. This case lays down the typical rule for assessing the appropriate standard of reasonable care in negligence cases involving skilled professionals such as doctors. 

In this case the claimant’s complaint was upheld by the Court as it determined that the standard of care was below that which is reasonable to be expected from the profession.

The Bolam test has been modified by the Bolitho v. City and Hackney Health Authority case in 1996. 

The Bolam test says that an action cannot be a breach of duty if it conforms with a reasonable body of professional opinion. 

The professional opinion relied upon cannot be unreasonable or illogical. If the opinion were illogical, then the action would still be a breach of duty. 

Only in "a rare case" would the courts find that the body of opinion is unreasonable. In many cases where a treatment proves problematic the patient might see two, or often more, dentists. 

If the treatment ultimately fails it is common for the patient to launch a complaint against all of the treating dentists. In these cases the concept of novus actus interveniens is important. This is often referred to as “breaking the chain of causation”. It occurs when a new episode of treatment is sufficiently distinct and invasive that the cause of injury must arise from this rather than prior treatment.

What is the purpose of malpractice insurance? MRSL’s experience

MRSL Enterprise has successfully used this concept to defend clients and one example in a dental context is given below.

  • A long established patient who had undergone a series of treatments with different dentists.Note this was a partnership practice with no treatment given by associates, so there was no vicarious liability aspect.
  • The patient complained of a series of issues which were not part of the treatments offered by our client. 
  • Solicitors for the patient adopted a scattergun approach and left the partners of the practice to fight amongst themselves about responsibility.

MRSL Enterprise’s action

We took up correspondence on behalf of the client and repudiated responsibility on their behalf.We support the client with discussions within the practice. The others within the practice did have a responsibility to some degree. 

The Outcome

The case went away from the client’s perspective. The indemnifiers for the other partners reached an apportionment with themselves and then the patient’s Solicitors. This was made easier by the others being with one indemnifier.

What we did not do

Suggest a contribution be made to “keep the peace” within the practice which is often the expectation and is equally often at odds with the facts of the individual case. Leave the client unsupported as the most difficult aspect was the intra practice issues around apportionment.

2: Causation. In order for there to be a liability the breach of duty must give rise to the damages complained of. 

Wilsher v Essex Area Health Authority is a current important case that established this principle. 

In this case a junior doctor administered excess oxygen to a premature baby that subsequently became blind. The administration of the oxygen was one of five potential causes of blindness. 

Without further proof that this was the sole cause of the blindness the case failed as on the balance of probabilities the oxygen was not the cause.

The General Dental Council has always required dental professionals to have adequate indemnity. 

This was enacted into law in The Health Care and Associated Professions (Indemnity Arrangements) Order 2014. 

By law dentists (and doctors) need medical indemnity. 

On 6th December 2018 the Department of Health and Social Care issued a White Paper entitled "Appropriate clinical negligence cover". This paper expresses the DHSC's desireto disallow discretionary mutual cover for clinical negligence. If this is implemented the cover provided by all of the DDOs would not meet the legal requirement.

What is the difference between medical malpractice and professional indemnity?

Medical malpractice insurance is another term for dental indemnity. 

This is a specialist version of a professional indemnity insurance cover which was originally designed for solicitors, architects, accountants and other highly trained professionals. 

The principle difference in terms of cover is that dental, or other medical, indemnity includes liability for bodily injury arising from medical treatment. 

Depending on the profession, some insurances have no cover at all for bodily injury. Solicitor and accountants’ insurance are unlikely to have this. Architects will be covered for injuries arising from the collapse of a building due to their negligence.

What is covered under malpractice insurance?

Dental indemnity protects the purchaser against their legal liability to pay compensation (including their own and claimants' costs and expenses) in respect of any claim of injury.

The scope of cover for all dental indemnity is limited to the activities declared to the provider at the time of purchase.

How much is malpractice insurance for dentists?

Insurance costs must cover three items:

1: The claims paid out

2: The costs of running the insurer

3: Any profit required by investors

In addition insurers collect an insurance premium tax which is currently 12% for the government. This is very similar to VAT but it is completely separate from VAT and cannot be offset against VAT.

 

To talk to us about anything mentioned above, please contact us today.

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