Dentists Indemnity Cover – Discretionary or Contractual?

There have been quite a few articles recently on the merits of indemnity arrangements for dental and medical professionals.  The providers of indemnity, both defence organisations and insurers, pointing out the shortcomings of each others proposition.  Who is right and who is wrong?  Simple answer is they are both right, but being transparent on the facts is a different matter.

It does seem that the insurance option is getting a bit of a bashing currently, but is this justified?  Well one of the problems I can see in the comparison the MDO’s are making at present is the way in which they treat the whole insurance market/policies the same.  Creating a picture that insurers will cover you year by year with high premiums to pay should you wish to leave to go to another provider.  This is not correct, as any good insurer or broker will ensure that the cover you get year on year provides cover for you from the point you first took out an insurance policy.  This is shown as the retroactive date on your policy and means that your policy will repsond to claims notified during a period of insurance for incidents that occurred after this retroactive date.  Similar to the way in which MDO membership will cover you instances that occur from when you were a member (occurrence based cover).  An insurance policy can also provide cover when you retire or die (run-off cover), usually at no additional premium as this would have been rated for in the cover you had in the previous years.  If in doubt just ask if it is included.

I think a key point here is the level of transparency to each option, with very little from the MDO’s as they are not required to do so legally.  I feel there is a degree of nervousness buidling within the MDO’s as the appetite of insurers for Medical Indmenity insurance is growing, with more and more competitive and comprehensive schemes coming on stream each year.  Personally I am still at a loss as to why the UK still accepts MDO membership as adequate cover, when it is at the descretion of the MDO whether or not they will provide cover to a member.  The lack of financial regulation of the MDO’s also raises concerns for me, because if there were a deterioration of the balance sheet for these organisations we may find out too late or its members will be hit with large increases to make up the shortfall.

I would say however, each has its merits and insurance is not right for all as is the case for discretionary cover.

Simon Downing – Managing Director MIC Ltd