Data analyzed by the National Practitioner Data Bank reveal that the average payment made by dental practices for negligence and injury is USD 143,000 in 2025.
Dental malpractice lawsuits are on the rise. They can vary from state to state. A report by the Office of the Insurance Commissioner of Washington State reveals that from 2016 to 2020, about 300 of the nearly 3800 medical malpractice claims involved dentists.
Dental practices account for nearly 11% of all malpractice payments in the healthcare industry in the country.
Many dental practices tend to select claims-made policies because they are cheaper than occurrence policies. The premium amount can differ from a few hundred dollars for a claims-made policy to a few thousand dollars for an occurrence policy. The practice must understand that a claims-made policy covers it from a suit only when it is filed while the policy is in force, and the event occurred during the coverage period.
For example, a procedure is done on a patient in December 2025 with a claims-made policy that began on February 1, 2025, and is valid till January 31, 2026. Two years later, the practice makes a switch to another insurance carrier. If in 2027, the patient files a case of an incorrect procedure, the policy drawn in 2025 will not cover the lawsuit.
The new policy cannot cover the case as the procedure occurred before the present policy began. The practice will have to bear damages and legal costs on its own unless it buys tail coverage.
An occurrence policy, while expensive, offers coverage for an incident that happened during the policy period, no matter when the claim is filed. If a patient faces a mishap while the policy is active, but the claim is reported a few years after the policy lapses, the occurrence policy still offers coverage for the practice.
Tail coverage is an extended reporting period and safeguards the practice from lawsuits filed even a few years later. It is applicable to a claims-made policy and is applicable even after the claims-made policy lapses. A dental practitioner might need tail coverage on retirement, when switching insurance firms, or when a dentist leaves an employer who offered coverage during the course of employment.
Tail coverage can be bought for multiple time periods and can be for a year, three years, or even an unlimited period of time. When opting for a claims-made policy, it is imperative to purchase tail coverage. To save a few hundred dollars, a dental practitioner might lose out on thousands of dollars by paying out of pocket as a settlement and legal fees.
Insurance companies can offer conventional dental malpractice insurance plans that cover professional errors and lapses for clinical procedures. This usually covers regular claims such as improper tooth extractions, diagnostic errors, root canal complications, the use of improper instruments, or incorrectly placed dental implants.
Regular coverage for practices is usually up to USD 1 million per claim, capped at USD three million annually. Many plans also cover support staff. hygienists and dental assistants at the same cost. If a hygienist causes an injury to a patient accidentally during a cleaning, the plan can provide coverage. Plans also cover defense costs in addition to the claims.
The dental practice needs to note that policy coverage does not cover any disputes, such as HIPAA violations, employment claims, or misconduct done intentionally. There can be an instance when a patient sues the practice for revealing personal information without permission. This is a privacy violation and not a malpractice claim. A wrongful termination suit filed by an employee will also not constitute a malpractice claim.
There can be a situation of pure consent or a consent-to-settle clause whereby the insurance firm can settle a claim with the written approval of the practice owner. While it sounds simple, one needs to know that any settlement of a malpractice claim gets reported to the NPDB (National Practitioner Data Bank). Such a move affects insurance rates and terms in the future, in addition to a dent in reputation.
There are also hammer clauses available whereby a practice can reject a settlement. However, if the judgment exceeds what the insurance company wanted to settle for, the practice will have to pay the difference.
As an example, the insurance firm is ready to settle a claim for USD 140,000. The practice does not accept this amount and is ready to appeal. Now, if the jury decides on a verdict of USD 200,000, then the extra USD 60,000 in practice will have to be borne by the practice in addition to paying for legal costs.
At present, the practice would have to pay an annual premium of USD 3500 on average. The actual amount, however, can vary depending on the state of the business. Some states in the country are prone to litigation, and the premium can rise to over USD 10,000 annually.
New York, Pennsylvania, and Florida have a higher-risk practice environment, while Iowa and North Dakota are examples of lower malpractice insurance costs.
The amount of the premium is also dependent on the specialty of the dental practitioner. A general dentist will have to pay a lower amount than a periodontist or an oral surgeon. A general dentist is involved in performing basic extractions. An oral surgeon needs to handle complex jaw surgeries and hence has a higher exposure to facing a dental malpractice suit.
A few states, like Wyoming and Indiana, among others, have made malpractice insurance coverage compulsory for the overall welfare of all parties at large.
The dental practice must consider the regulatory guidelines in the state where the business operates, as rules vary across states.
An insurance specialist can help the dental practice, as one needs to consider nuances associated with an insurance plan, such as tail coverage, consent-to-settle clauses, or claims-made policies. The team needs to confirm if defense costs are in addition to policy limits or if tail coverage can be added later.
The team needs to check if the plan will also cover dental assistants and hygienists. The team also needs to take note of coverage exclusions. Malpractice insurance is not just about checking the licensing requirements. The practice needs to protect its future and financial standing in the years to come.
The healthcare industry is prone to challenges and risks. A dental practitioner performing an oral surgery today can face a lawsuit five years later. Malpractice insurance helps the dental practice and the entire team get covered against any potential liability. The team must understand the difference between claims-made and occurrence policies. Taking tail coverage when needed can save the practice or the individual from financial risk even years later. More importantly, based on the nature of operations, getting the right coverage can make a difference between high-risk exposure and peace of mind.
