How To Stop Overpaying For Dental Indemnity with Tom Chaston [CPD Available]

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Dental indemnity is one of the biggest essentials in UK dentistry, yet the way it is priced and the way decisions get made behind the scenes can feel deliberately hard to follow. We sit down with Tom, a dental indemnity specialist at AllMed Pro, to lay out how the system really works so we can stop guessing, stop overpaying and start buying the right protection with our eyes open. 

We dig into why indemnity premiums rise, looking at claims patterns, claims frequency and the true cost of a case, including legal fees, defence costs and expert witness reports. Then we get practical about risk rating: how extra sessions and higher-risk procedures can change the premium, why implant work needs a more detailed conversation than a simple tick-box, and how declaring your work accurately can prevent unnecessary price hikes later. 

We also myth-bust the hot topics dentists debate online: what discretionary cover actually means at the moment you need help, what insurance-backed (contract certain) cover changes, and why non-disclosure is one of the few things that can derail support. For principals, we unpack vicarious liability and non-delegable duty of care, plus how structuring the right policy for your practice entity can make a real difference when a claim arrives.

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Disclaimer: All content on this channel is for education purposes only and does not constitute an investment recommendation or individual financial advice. For that, you should speak to a regulated, independent professional. The value of investments and the income from them can go down as well as up, so you may get back less than you invest. The views expressed on this channel may no longer be current. The information provided is not a personal recommendation for any particular investment. Tax treatment depends on individual circumstances and all tax rules may change in the future. If you are unsure about the suitability of an investment, you should speak to a regulated, independent professional. Investment figures quoted refer to simulated past performance and that past performance is not a reliable indicator of future results/performance.

Transcript

Why Indemnity Feels So Confusing

Dr James 1:15

Dental indemnity is something that confuses the absolute heck out of us dentists by way of its inner workings, which tend to be obfuscated. So we are here today to just the real reel on dental indemnity from the inside, and that's why I'm joined by Tom from AllMed Pro Dental Indemnity Specialist to Dentist. This episode is a little bit of an expose as to what happens behind the scenes in a dental indemnity firm. We're gonna be talking about why those fees go up every year, discretionary versus non-discretionary cover, and a whole load of other juicy stuff that we tend to see on dental forums. Giving an explainer and also allowing us to understand how we can get the best deal as dentists. Looking forward to this episode as ever. As ever, you can claim your CPD for this episode within the official Dentists who invest Smart Money Members Club. Smart Money Members Club also includes multiple mini courses and webinar series on finance for dentists, including how to become as tax-efficient as possible, as well as understanding investing. All of this content counts as verifiable CPD, and you can download your certificates there and then on completion of each lesson. In addition to this, we also include a whopping 10% discount on your dental indemnity and a 5% discount on lab bills for dental principals, amongst other perks and discounts for members. Please use the link in the description to claim your verifiable CPD for this episode. Tom, welcome to the Dentists Who Invest podcast. We've been joined by your colleague a few times, Adam, from Omed Pro. And we've we've kind of we we've dealt with some of this stuff before, but I want to go deep today. I want this to be a little bit of an expose, or how can I say this? You know, enlightening Dennis as to as to what happens and why we see the things that we see and why we have the experiences that we do with indemnity. And obviously the first thing to say is indemnity is absolutely crucial. It's so important that we have it. We just want to stop Dennis overpaying for it and making sure they get a good deal.

Why Premiums Increase Over Time

Dr James 3:14

Tom, if you're happy, I feel like that's probably a really good thing to jump in on because Dentists always observes that their indemnity goes up seemingly exponentially every single year. And I guess they're curious as to why that is necessary from behind the scenes of an indemn. Or is that even always necessarily true as well? It seems to be the narrative.

Tom 3:38

Sure. Well, firstly, thanks for having me uh today. Um, so yeah, in terms of the indemnity rates, as a market as a whole, um, the way that the industry tends to work is they look at claims pattern, claims frequency, claims costs, and included within that are things like legal cost, defence costs, expert witness costs, other disbursements and compensation. So we look at it as a whole, and they then view how much has been paid out or potentially gonna be paid out in in those costs and those claims versus how much is being collected in terms of premium. And they use that to kind of almost work out like a profit and loss kind of thing. So if the claims are going up and the costs are going up and they're going up quicker than what the insurance premium collected is going up, then um they'll take a view and think, well, actually, you know, we're gonna be making a 10% loss this year, uh, therefore we need to put the rates up by 10%. That's generally a very kind of high-level summary of how the insurance industry works in terms of premiums increasing, assuming there's no inflationary additional elements to it. For us, we we tend to try and lock our rates in as best as possible. So we don't tend to increase our rates year on year unless uh a member has had additional patient complaints that are going to lead to claims or lots of costs paid out, and then obviously we will need to look at that on a case-by-case thing, and we tend to individually underwrite when when that when those kind of um circumstances arise. But generally, as a rule of thumb, so far uh we tend to work on the basis that our rates don't usually go up um as frequently as maybe as what we've seen in the market over the years.

How Your Clinical Risk Is Rated

Dr James 5:16

Interesting. Okay, so that would be high-level the reason why it occurs behind the scenes. And then I'm just gonna ask a question, and this might have an obvious answer and it may not. Um obviously, if we're taking on more sessions or we're doing work that is more intricate, intricate uh in nature, or perhaps requires a higher skill level, such as implants, then is it just as simple as saying that, okay, cool, well, there's a lot more that can go wrong with the implant, and that's why the premium is significantly higher? Is that is that's the meaning of the case?

Tom 5:50

Yeah, generally that's right. Yeah, generally that's right. So if somebody's increasing the I guess the risk factor of their activities, and of course that will have a bearing on premium. Um, from our point of view, we tend to have allowances within our rating structure. So, for example, you can do up to 10% of your overall work is implantology uh before in terms of physically placing dental implants before we'll consider any increase in premium. So if you're doing just one or two percent implantology work a year, doesn't automatically mean that we'll increase the rate. Um, we tend to try and create a bit of a tolerance level within that. One of the things I would say, particularly around things like implants, is a lot of indemnity providers will just ask, do you do implants? If so, what percentage of your work is implant related? We tend to drill a little bit deeper than that. So we will ask that question and then we'll follow on and say, of your implant work, how much as a percentage is restoration only of those implants? Because if it's sort of like 90% restorative and not physically placed in the implants, actually we'll consider that as a lower risk. So what that means is it can actually reduce your overall risk factor in terms of how we underwrite, which means we can charge a lower, lower premium because we're trying to understand more about the risk. And what we want to make sure is that we've got as detailed information as possible so we're not hitting people with unnecessary hikes in the pricing. Um, so that's just one example of maybe how we try and do things a little bit differently to try and support dentists with their rates and their premiums.

Dr James 7:19

Sure. And you know what? Sometimes I like to ask the questions that have a seemingly obvious answer because sometimes you get lots of obvious answers in return. Uh so yeah, good good to explore that. And 10% again, maybe to stay at the obvious, that's 10% of time. Is that right? That's how that's how that's quantified, not turnover or anything like that, or profit.

Tom 7:37

No, it it it's it's yeah, 10% of time, time, time related, yeah.

Dr James 7:41

Good, good, good, good, good. Just triple checking on that one. Okay, fair enough. Tell

Discretionary Cover Versus Insurance

Dr James 7:45

me this, because this is something that I see that comes up on dental forums so much. And I'm not sure how much of this is urban myth uh versus versus truth, Instagram versus reality, I guess, if you will, uh, in in a in a way. Uh so what I would like to know is discretionary versus non-discretionary cover. I mean, a lot of dentists, the way that they portray that to each other is that if you do not have non-discretionary cover, as in you have discretionary cover, that ultimately it's optional whether or not you will have a payout or you will be covered if a claim is made against you. Is that true?

Tom 8:33

I mean, at a very simple level, yes. I mean, the whole nature of something being discretionary is it's up to the indemnity provider at the appointment of a claim whether they actually will step in and support you and protect you. You know, if that wasn't the case, then that'll be a contract certain model anyway. Um, you know, that the defence organizations will have their arguments for providing discretionary cover. Um, what I would say is, you know, I'm not sure that I would want to insure my house on a discretionary basis. And whilst the majority of our own business is very dental focused, we do look after a number of surgeons and consultants who are in higher risk areas, I suppose, of medicine. And the majority of those sectors, when it comes to their private work, is all through insurance-backed providers rather than the discretionary providers. So I would I would say, yeah, I mean, I wouldn't choose personally to insure something like my clinical negligence on a discretionary basis. I would always want that reassurance, that contract with a provider, that if something does uh heaven forbid go wrong, then they are duty bound to step in and protect me. And I suppose one of the counter-arguments against insurance historically has been that, oh, you know, insurance providers will will sit behind terms and conditions and they will use that to reject claims, um, you know, instead of trying to cover people. However, you know, when you actually look through the terms and conditions, they're not designed to do that. And there are laws in place to prevent insurance providers from putting in place ambiguous terms or unfairly applying terms to reject claims. So from my own personal experience, when I've seen claims rarely rejected, it's usually because somebody's doing something that they've not declared. So they might be doing implants when they've told us they're just doing something like general dentistry, you know, or there's serious um issues around what they've declared on their application form. That's you know, non-disclosure is usually the one thing that could lead to a claim being rejected, but then that applies whether you're indemnified through a discretionary provider or insurance, it's not unique to insurance. You know, the majority of the time terms and conditions are there, but they're not they're not real, you know, when you when you really truly analyse them, they're not they're not really unfairly created to try and prejudice a dentist's position when it comes to a claim.

Dr James 10:56

Understood. So non-discretionary, ultimately they uh sorry, with discretionary beg your pardon, ultimately the provider has the option whether or not they choose to back you, and that's in the T's and C's, and they don't is it fair to say they don't even necessarily have to have a justification?

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Dr James 11:14

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If A Provider Refuses Support

Tom 13:04

My understanding is that we don't have to have a justification. So we over the years I've had a lot of dentists come to us who have claimed to have been unfairly treated by a discretionary provider, where at the point of the claim, the uh defence organization decided they weren't going to support the member, um, didn't need to give them a reason why, and there was no kind of right of recourse. So I guess the added benefit you've got through an insurance backed provider is if for whatever reason uh the insurer did refuse to cover you, you do have rights of recourse and additional channels to support you and potentially overturn that if that's an unfair decision to reject the claim. Like I said, in my experience, I can't think of a indemnity claim that we've ever unfairly rejected. I mean, I suppose you know I would I would say that, but I guess we've built our policies to be as wide as possible to provide as much protection in as many different types of circumstances as possible. Um, but yeah, when it comes to discretionary, that's something I've definitely seen over the years.

Vicarious Liability For Principals

Dr James 14:05

Interesting. And you know, there's one more thing I'd like to touch upon with regards to liability, and then I want to move back to some some of I want to move on to some other stuff. But that is the the chestnut of vicarious liability, uh, which to my understanding means that if you are a principal and you have an associate in your practice who really, really, really messes up uh and for whatever reason can't come now. This may or may not, this is the part that I'm a little unsure on, so you might want to just set the record straight here in just a second. My understanding is if they can't come up with the funds, the practice is liable. Is that is that is that how it works?

Tom 14:41

Yeah. Uh so you've got two other elements to the vicarious um piece. You've got uh the non-delegable duty of care. So does the dental practice have an overarching uh responsibility for the care of that patient, irrespective of who the treating clinician is? That's the first thing. And then um you've got whether the uh practice is actually vicariously liable for the actions of their associate. So, you know, in there's been a couple of the Hughes versus Rattan case, which is a well-known documented case. Um, first that the courts would look at whether the dental practice had a non-delegable duty of care, and if that's proven uh to be the case, then they'll look at whether the practice is vicariously liable for the actions. So, for example, you you're quite correct. If an associate um the common one used to be the associate worked for the practice for five or six years, leaves the practice, moves overseas, claims come in and they can't get hold of the associate. What happens then? Well, the simple answer is the buck then does stop with the dental practice, and the dental practice will be on the hook for defence claim, defence costs and any compensation. So we've been trying to kind of recommend a vicarious liability cover for years, you know, a long, a long time before it really hit the headlines as being something that principal dentists should consider. Um, I think the one thing I've seen again on the vicarious piece is the way that the cover is structured in the market sometimes. So we've on occasion seen indemnity providers just tagging on vicarious cover to a principal's policy or to a dentist's policy. We think actually the ownership structure of the practice should dictate how that vicarious cover is procured. It doesn't necessarily have an impact on the pricing. But for example, if you've got a sole trader dentist, then it is going to be most likely appropriate just to tag on the indemnity to their own personal indemnity policy. If you've got a partnership, so Dr. A and Dr. B trading as gentle dental, for example, we think you should have a separate policy set up uh in the name of Dr. A and Dr. B trading as gentle dental for the vicarious liability piece on its own. Uh, and same if it's a limited company, a separate policy we feel should be set up in the name of that limited company. Doesn't really have any bearing on premium, it's just in the event of a claim, the way that the uh claims letters are positioned, they drag in entities and people in a certain way. And so by structuring the vicarious cover in the correct way, it just makes life so much easier if there's a claim.

Dr James 17:15

Yeah, for example.

Tom 17:16

Does that kind of make sense?

Dr James 17:18

I mean, I obviously I knew I didn't know that was possible for a sole trader to uh uh how I can say this, um, design their indemnity in that way or structure their in that way where it's actually a separate company. So uh that's an interesting one. Did not know that. I'm glad I asked that one really.

Tom 17:35

Well, I guess I guess if you think about a partnership model, if you've got one principal who's got vicarious on their own policy and another that hasn't, and the claim comes in for a vicarious, the left is going to come in and try and drag both principals in. So if one's got the cover and the other hasn't, does that mean one of the principal's liability indemnity policies takes the full hit for it? You know, it just gets messy and complicated, you know. And also if you've got one policy that sits there for the vicarious, um, uh, you know, in a way that it needs to, claims, costs, legal costs are so much easier. You've got one set of law firms dealing with the whole thing instead of different indemnity providers and different law firms and defence firms, it just everything is easier, everything's more efficient, and it keeps the cost down, which then keeps premium down.

Dr James 18:18

I'm so glad I asked that because that is the whole point of this podcast is that we learn things that we didn't know about before. So there you go. And it completely makes sense now that you've explained it. All

Switching Providers Without Losing Protection

Dr James 18:27

right, just to cover one more thing, which was more on the cost side of things, which I was planning to ask even before this podcast started. I would like to know if there's any truth to this one, because I've seen this bounced around sometimes on dental forums. You know the way when you take out a contract with an energy company, for example, for your house, right? And they give you really good rates at the start, right? And that's just to pull you in. And then before you know it, behind the scenes, they're scaling those exponentially until they're way above market rate. But because you have been paying this company for so long, there's a certain amount of complacency that keeps you there. Uh, and then if you go and shop around and you get another policy, it's so much better. I had this exact thing with my mobile phone this weekend, right? I looked at how much is coming out of my account, and I would I realized I could get a new airtime plan and a new frigging device for less than what I'm paying, right? So I I got caught out by this the other day. Um, it also happens with income protection, but I didn't say that, but it does happen with income protection. Um that's another really good example, and another really good, yeah, phone tariffs is a probably a really good example too, which we've already said. But yeah, anyway, first thing to say is does that A make sense? And B, does that happen in the indemnity world as well?

Tom 19:46

Um, so it does kind of make sense. Uh, I think when it comes to indemnity, you've got to really look at what different providers are offering as well. Uh, it's not just about price, although I understand the sensitivity around the pricing, particularly at the moment where everything feels like it's getting more and more expensive. Dentists should absolutely take a look at what they've got and is it the correct fair premium and is it the best deal for what they need? But I guess you need to be mindful if you're jumping from one provider to another, what does their support and service look like in the event of a patient complaint claim, GDC investigation, you know, what does uh additional covers and things look like? So there's a lot, there's a lot to it. Um, and it's understanding which questions to ask. When you compare two things side by side, it's okay, this one might be cheaper, but is there a kind of fundamental reason why? When it comes to energy, you know, energy is energy, right? Your electricity bill is your electricity bill, it's gonna be you would think it's the same whether you'll be, you know, um British Gas or uh or Octopus Energy, for example. So it makes sense to absolutely follow follow the money on that. With indemnity, there's a few quite a few moving parts. What I would say now is the market has moved on quite a lot over the last five or six years. So the indemnity providers that are kind of out there, whether it's insurance backed or defence organisations, they're usually the main ones, the most well-known ones now are kind of operating on a level where the covers are usually pretty good, but there's still going to be differences between them. So definitely, if you're thinking of looking, it's not a bad idea. Again, especially if you're seeing your premium going up or you've got colleagues who you think are doing the same thing as you in terms of activities and work patterns and seem to be paying a lot less, then you should definitely take a look at it. Um, but I think when you do that market exercise, you need to really drill down into what you're getting for the money as well and make sure it's not some kind of false economy switch. So you definitely need to have that in mind. Um, but absolutely, I think you know, uh premium sensitivity is key. And if you feel like you are paying too much, then definitely have a look at it.

Dr James 21:56

Nice. So the analogy that I described earlier, it's slightly analogous, but not fully, because it's not comparing lack for lack always, and it's always into the policy.

Tom 22:06

Exactly. Yeah. Yeah, and there'd be nothing worse in the world, you know, than switching providers and having a claim arise or potential claim and looking for cover and support you previously had, and now you don't have it. You know, that that would be the worst thing ever.

Dr James 22:19

So sure, sure, sure. So we're kind of there's kind of a balance of energies there. It's about shopping around, but it's also about reading the T's and C's and making sure that it's right for you.

Tom 22:29

Yeah, exactly.

Calling For Advice And Premium Myths

Dr James 22:31

Which brings me to another chestnut, which I see all of the time on dental phones, and I'm sure the listeners are gonna be listening, their ears are gonna perk up with intent, okay, whenever I say this one, because this is always thrown around, all right? And that is factor fiction, myth, myth, we're gonna myth bust this one, right? When you call up your provider to ask for some advice because you can smell a complaint, does that then mean that your premium goes up subsequently?

Tom 22:58

I can only comment from our position, but from our position, no, it doesn't.

Dr James 23:04

As it should do.

Tom 23:05

As it should do. I have definitely seen um with other providers when we request claims history, letters of good standing, that kind of thing. I've seen uh dentists come who have had a lot of activity where it's just calls for advice and calls for assistance and no claims, where their rates have gone up. Um but the view we take is we want people to contact us because a lot of the time they're asking for help on actually mitigating the situation. They're trying to get a bit of advice around how to navigate it, how do we reduce the risk of this blowing up, which in turn helps us reduce cost, defence costs. We can successfully defend things more quickly, we can nip things in the bud sometimes, um, depending on the approach required. So we actually would encourage people to make contact with us because it's the best way we can help somebody really avoid a huge problem. Um, and we wouldn't penalize somebody for that because that's the that's the kind of behaviors we want to support.

Dr James 24:04

Makes complete sense. I mean, anything that you can do to mitigate the eventual payout by all uh is obviously a good situation, so that seems to be entirely. Exactly.

Tom 24:17

And our dental legal advisors, they regularly get calls from clients of ours, and and it might not be a potential claim, it might be a tricky set of circumstances that have arisen with the patient, and they just want a bit of advice on how to navigate that as well, just really to maximise the best outcome for the patient. And our guys will, you know, our dental legal advisors will get on the call and they will help in that situation as well. And so it's not we're not just there to try and help when something has potentially gone wrong, it's actually we're there to help you try and work through complicated situations to to avoid something going wrong in the future. Um, it's that extra risk management piece that we try and really kind of champion as well.

Dr James 24:57

Nice, nice, Tom. Those were probably the biggest myths that are out there when it comes to dental indemnity. I'm glad that we dealt with all of those bang, bang, bang, uh, in the fashion that we did. But I'm sure that there'll be people out there who are listening who may have other more specific questions. And if that is the case, how are they best off reaching out to you?

Contact Details And 10% Discount

Tom 25:20

So you can reach out to me directly. I'm more than happy. And my email address is tom at allmed.co.uk. Uh, we've also got a lot of FAQs on the website, and our team can obviously help and walk people through any queries that they've got. Um, you know, applications for indemnity are often done via our website as well. However, again, you're more than happy for people to reach out to me directly.

Dr James 25:41

And another thing worth mentioning just before we wrap up, Tom, which you very kindly extended uh to the Dennis Invest audience this year as well as last year. We we did this too. Uh, I know that you guys are happy where appropriate to offer a 10% discount on All Med Pro's indemnity quote, which tends to be quite a competitive quote anyway when compared to others. So it's a little bit extra on top. Obviously, that would be pending a discussion with your sales, but it's nice to know that it's out there and something that you're willing to offer.

Tom 26:12

Of course, and we're happy to support your um you know your community with that.

Dr James 26:15

Amazing. Tom, thank you so much for your time. Hope you have an absolutely spanning Thursday and we'll speak again.

Tom 26:20

You too.