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BDA Indemnity now protects limited companies


  Posted by: The Probe      13th May 2022

The British Dental Association has launched insurance cover for entities, protecting limited companies and other types of legal entities with the same comprehensive cover as their personal indemnity policyholders.

The BDA estimates around 60% of dentists run their businesses as entities for the purpose of carrying out dental work, which may create tax efficiencies, but it also creates an unfortunate loophole in indemnity cover.

If a lawyer makes a claim against an entity, most indemnity providers will not cover it, as the claim is not against the named member or policyholder. This results in the claim and associated costs needing to be paid by the company and ultimately the dentist(s) and other shareholders.

Head of BDA Indemnity, Len D’Cruz said: “If you run your dental business as a limited company or entity you can face claims of vicarious liability either individually or jointly with others. A patient’s claim could cite the treating dentist or the name of a limited company, and increasingly it is the latter.

“If you are a member and already hold an indemnity policy with us, we can add the cover as an endorsement or extension of your policy. This will endorse your policy for your name, as well as your limited company. We can also cover you retrospectively back to the start date when your personal cover started, in the event a past claim is bought against your entity.

“It’s worrying how few people in the industry understand these risks. Indemnity providers have told dentists in these cases to request claims are bought against them personally, when the entity has been sued. However, if a dentist cannot persuade the lawyer to do this and the entity is pursued, this leaves the practice owner on their own to bail themselves out, out of their own pocket or by drawing upon the company’s assets without any third-party support or contribution from an indemnity provider.”

The BDA believes entity cover can protect you in the event that you come up against these financial and legal risks. Like their professional indemnity cover, the newly launched bolt-on is occurrence-based and contractually certain.

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