Understanding State Disciplinary Coverage
by Kathy Everitt
Sunday, February 24, 2019
State disciplinary coverage is an important feature of your malpractice coverage. You may have easily overlooked it, not realizing you have it, and may not understand its value.
State disciplinary actions are defined as a covered proceeding in your PSIC professional liability policy. The limits are considered supplemental, which means they are separate from your policy limits. Your policy provides you with a $25,000 legal expense limit per policy period for covered proceedings.
When to Use It
Coverage comes into play when the covered proceeding is initiated, and the initial act giving rise to the action occurs on or after your specific effective and/or retroactive date, and prior to the termination of the policy.
What It Does
In simple language, we will provide you with defense counsel to help you navigate the choppy waters of a dental board investigation. The policy does not require the action to be part of a malpractice claim, or lead to a malpractice claim – it simply requires notice of an investigation.
The policy will not pay for any sanctions, penalties, fines, damages, settlements or assessments. It will also not apply to any criminal actions or legal expenses arising out of actual or threatened sexual abuse or related grounds. Always be sure to read your policy for clarification or additional information.
As the insured, you must provide us written notice that a proceeding has been initiated. Upon receipt, we have the duty and right to defend you (the insured), appoint counsel and investigate the allegations.
State Board Obligation
State boards, as well as professional associations, must report certain disciplinary actions based on professional competence or conduct to the NPDB (National Practitioner Data Bank). Particular actions that may be reported include license revocation, suspension, restrictions, censures, reprimands and probations.
A report to the NPDB, which will be on your license for the rest of your professional life, may not be the only adverse outcome. There is the potential for collateral damage: loss of third party payer contracts, exclusion from participating in Medicare/Medicaid or other Federal or State health care programs, and a denial of malpractice coverage.
Remember to protect your license at all costs. Exchanging emails and documents may not be enough, and is not advisable when a state disciplinary action is brought to your attention. If you receive notice of a board investigation, waste no time in contacting PSIC and talking with a claims representative. If you missed the recent issue of the Dental Connections, you can review this issue here:
https://www.psicinsurance.com/dentists/risk-management/dental-insights/adverse-occurrence-reporting.aspx which details more information on disciplinary actions.
We are here to protect your reputation. It is what we know; it is what we do.