Tail coverage is an endorsement (or an addition) to your insurance that allows you to file a claim against your policy after it expired or was canceled. It applies to claims-made insurance policies and typically involves paying your insurer an additional fee.

How long do you need tail insurance?

Most tail quotes are only good for 30-60 days and once the quote expires, you cannot have it reissued. It’s important that you plan ahead for the purchase of your tail insurance and begin considering outside finance options, if necessary.

Who should pay for tail coverage?

If either party terminates with cause, the other party is responsible for paying the cost of the “tail coverage”. The physician employee pays in most cases, but not if he/she is terminated without cause or if he/she retires. The parties split the cost 50/50, regardless of the type of termination.

What does retroactive date mean?

A retroactive date defines how far back in time a loss can occur for your policy to cover your claim. If a claim happens prior to your retroactive date, your policy won’t provide benefits. It’s a feature of claims-made professional liability or errors and omissions insurance.

Is prior acts coverage the same as tail coverage?

Claims made policies have distinct limitations on occurrences that happened before the policy’s inception (starting date), and after policy coverage ends. Prior acts are events that happened before a policy was in place, and “Tail” is the term for after the policy ends.

What happens if I dont buy tail coverage?

However, if you decline to purchase tail coverage, any claims brought or alleged against you after the policy’s termination date would become your responsibility to defend and indemnify.

How is tail insurance calculated?

Tail insurance generally costs approximately 200% of the expiring claims-made premium. For example, let’s say your annual premium is $10,000. Then your tail coverage would cost around $20,000. While many doctors accept the first tail quote they are given, savvy doctors who work with MEDPLI save 20% on average.

What does long tail mean in insurance industry?

Long-tail may also refer to a type of liability in the insurance industry or to tail risk found in investment portfolios.

What kind of tail coverage can I get?

Some insurance companies offer options to doctors such as an “extended reporting” endorsement that is less expensive than purchasing standard tail coverage. Another option is to purchase lower limits of liability or limited term tail coverage as opposed to the standard unlimited term.

When does medical malpractice tail coverage go into effect?

In contrast to a standard policy, tail coverage provides protection for medical malpractice claims that are reported after the provider’s policy expired or was cancelled. Here is an example of how tail coverage works: Doctor A’s insurance policy is in effect from January 1, 2010 through December 31, 2020.

Which is better unlimited tail or claims made policy?

The claims-made policy costs at least 35% less when you compare the cost of buying a claims-made policy and the unlimited tail against having occurrence coverage for the same period. The savings increase if you qualify for a free death, disability or retirement tail.