Upon retirement, a physician no longer needs medical malpractice insurance so they cancel their policy. But what happens if a malpractice claim is filed against them a year after they have retired? Are they protected from the claim? The answer is yes—if they have tail coverage. But what is a tail policy?
Tail Coverage Explained
A tail policy is also called an extended reporting period endorsement. This coverage allows you to file claims against your policy even though coverage has expired. The claims must be for insurable events that occurred while your original policy was in effect.
Who Needs Coverage
Tail coverage isn’t just for physicians. Any insured with a claims-made policy should also have a tail policy included. There are several different types of claims-made policies.
- Professional liability
- Errors and omissions
- Directors and officers
Length of Coverage and Cost
This type of coverage is limited in duration, with policies written in 1-year increments. Typically coverage is needed for as long as the claim filing statute of limitations in the insured’s state. Duration affects cost, as does policy type. For professional liability insurance, the insured can expect to pay a fixed percentage of the final premium.
A tail policy should be another part of your risk management strategy to protect you and your business from liability.