Tail coverage is a specific type of policy add-on that can provide coverage above and beyond a standard medical malpractice policy. If you are a physician who plans to switch to another insurer and/or leave medicine in the future, having tail coverage is recommended.
Malpractice insurance applies when patients or other interested parties file malpractice claims that lead to legal fees and/or expensive settlements. In order for standard medical malpractice insurance to cover one of these claims, the claim must relate to an incident that occurred while the policy was in effect AND the claim must be filed while the policy is still in effect. In cases where either of these two conditions is not satisfied, a standard medical malpractice policy won't pay any benefits. Tail coverage exists to cover claims that are filed after a policy expires but relate to incidents that occurred while the policy was still in effect.
For example, assume a physician had an active medical malpractice insurance policy from 2009 to 2011. In 2012, a former patient files a claim related to an incident that occurred in 2010. Although the original policy will not cover this claim, tail coverage would.
Tail coverage offers needed protection for physicians who plan to switch malpractice insurance providers and/or leave medicine altogether. However, the premiums for this type of coverage can be expensive, sometimes costing a two times the premium for a standard medical malpractice insurance policy. For this reason, you may wonder whether tail coverage is a necessary purchase for you.
For physicians switching to another policy, one alternative to tail coverage is nose coverage. Nose coverage will cover malpractice acts committed before the new policy goes into effect. If you are switching to a different malpractice insurance carrier because you are joining a new practice, your new employer may offer to cover part of your nose coverage expenses.
If nose coverage is not a viable option, you may be able to lower the cost of tail coverage by purchasing limited term tail coverage or a tail coverage policy with lower liability limits. Some insurance companies may also allow you to purchase an extended reporting option, which is typically more affordable than tail coverage.
At Axis Insurance Services, we aim to help our customers identify their exposures and protect themselves. Founded in 1999, we offer insurance programs to a wide variety of professionals and industries including attorneys, real estate, healthcare, architects, and more, and also have a wholesale division. We pride ourselves on offering flexible insurance coverage tailored specifically to each customer’s needs. To learn more about our solutions, contact us at (201) 847-9175 to speak with one of our professionals.