Most Florida dental practices are structured as a corporation or professional association. Vicarious liability exposure occurs when the dentist or dentists operate as an entity separate from themselves. If only one dentist is involved in the practice, this vicarious liability exposure is very small, and can be added to the individual dental malpractice insurance policy. When there is more than one dentist involved in the practice, however, the exposure is greater. In this case, the practice needs to purchase a separate entity policy, to cover the dental entity and its employees for malpractice insurance lawsuits. Coverage is also provided for the entity’s vicarious liability resulting from the acts or omissions (malpractice) of the dental affiliates working on behalf of the entity.
Normally, the entity and the dental affiliates maintain the same limits of liability to avoid one becoming the deep pocket for the other in a dental malpractice insurance claim. Entity policies are not issued with liability limits greater than the limits of the dentists who practice under the entity.
The cost of the dental malpractice insurance entity policy is based on the number of dentists involved in the practice and the nature of their individual dental malpractice insurance coverage. If a separate entity policy is issued, the practice is protected for exposures of current and past dentists. So, if a dental affiliate leaves the practice, and a dental malpractice insurance suit is brought against the entity at a later date, there is coverage. The entity is also protected if it is the only defendant named in a dental malpractice insurance claim.
John Gracey Backer, CPA
John Gracey Backer, CPA, is the Treasurer of Gracey-Backer, Inc., an Insurance Agency in Delray Beach, Florida specializing in All Lines of Malpractice, Professional and Personal Insurance for the Healthcare Provider. He can be contacted at 800-272-6055 ext 128, or at firstname.lastname@example.org.