Understanding Tail Coverage

When you buy insurance, you’re buying financial protection for a set term. As a result, it’s not usually possible to make a claim for damages after the term is over, even if the damages occurred during the policy’s lifetime. Renewing a policy often changes that, but if you switch providers or retire from business, you’re likely to need tail coverage for many types of insurance.

Post-Policy Protection for Malpractice Claims

Any time you’re closing a policy and there’s a chance a claim could arise after the policy is over based on an event that happened while it was in force, that’s a cause for tail coverage. Tail insurance is literally an extended reporting window on the terms of the old coverage, either provided by a tail coverage specialist or by the original insurance carrier. Tail coverage and malpractice claims are most important for doctors and lawyers, but any professional carrying professional liability coverage should consider it.

If you’re changing practices or partners at your existing practice, you’re also likely to need tail coverage. Often, an entire practice is covered under one policy, and if the makeup of that practice changes, the policy needs to change. That means you’ll need tail coverage, whether you get it as part of your new policy or as a separate instrument.