The short answer is – very.
Every Claims-Made Professional Liability Insurance Policy has a retro-active date. For a new oral surgeon or dentist just beginning practice it should be your first day of practice. Experienced dentists may have a different retro-active date depending on their insurance history.
In most cases, a Dental Malpractice retro-active date determines how far back a bodily injury or professional injury caused by dental care will be covered by the policy. For example, a new dentist, Jane Doe, DMD begins practicing on July 1st 2012 and purchases her Dental Professional Liability policy effective July 1, 2012 to July 1, 2013 with a retro-active date of July 1, 2012. On August 1st 2012 she receives an incidence notice from an attorney for dental care she performed on a patient July 3rd, 2012. This would be a covered claim under the policy – since it is within her policy period July 1, 2012 and July 1, 2013 and is after her retro-active date. However, if this Dentist had waited until July 5th to place her coverage into effect, the claim would NOT be covered because the claim would have occurred prior to her retro-active date and effective date.
Now, let’s say Jane joins a group on March 1st, 2013 and wants to cancel her current policy and go with the new group’s insurance. She has two options to make sure her dental care work from July 1st to March 1st is covered. She can either purchase an Extended Reporting “Tail” Endorsement which will cover her or her estate for that specific time period indefinitely or she can write the new policy with an effective date of March 1st, 2013, but with a retro-active date of July 1st, 2012. Either way she will be covered for her prior acts back to July 1st, 2012. However, if she does not pursue these options, she will be solely responsible, “out of pocket”, for both legal defense and/or any claim payments, for the period of July 1st 2012 to March 1st, 2013.
Experienced dentists may wonder why they are keeping their original retro-active when there is a statute of limitations on Dental Malpractice claims. Although the statute is important to know, it is not to be considered in determining the retro-active date as the statute may change and often varies depending on the type of circumstances or patient seen, for example the date of discovery, children and the mentally challenged.
In conclusion, the retro-active date is extremely important and should be maintained unless an Extended Reporting “TAIL” Endorsement is purchased.