Historically "Tail Coverage" is an extended reporting period endorsement, offered by a physician's current malpractice insurance carrier, which allows an insured physician the option to extend coverage after the cancellation or termination of a claims-made policy
Tail is time sensitive and the premium is based on the recently passed work.
Tail coverage is only necessary when a Claims-Made policy is cancelled or terminated AND the insured physician cannot secure “Nose” coverage aka “prior acts” from a new insurance carrier.
Many physicians contemplating employment by larger healthcare systems may be required to purchase tail coverage because most hospitals/health systems are self-insured and either can’t or won’t provide the incoming physician with prior acts or nose coverage.
The offer to purchase tail must be made within 30 days of canceling the most recent medical professional liability insurance policy.
It is difficult to beat the price of the recently passed income and insurance carrier however in recent years the independent tail market has expanded bringing finally some leverage and competition within the relatively narrow niche of medical professional liability carriers. Within the past few years a number of insurance carriers have introduced extended reporting policies (also known as stand-alone tail policies) to compete with current malpractice carriers for tail coverage business. Physician’s now have a choice when historically a choice didn’t exist.
In the standard preferred medical malpractice market, tail policies do not have a termination date in the future for when claims can be reported (these are referred to as indefinite extended reporting endorsements).
More commonly when independent tail policies are issued, and for many facilities and Healthcare organizations, there are options to purchase finite extended reporting periods. It is common to see one year, three year and five year terms. Competition has introduced flexible terms and choices: insurance carriers also offer physicians multiple tail coverage options, including purchasing lower limits of liability, purchasing limited term tail coverage versus the standard unlimited term.
In order to price and underwrite stand-alone, independent tail policies, you should provide your most recently completed application, a copy of your declarations or Certificate of Insurance, and a company generated current dated claims history report. This is the currency that is used to provide the necessary third-party analysis for Underwriters.
Although it is expensive and there are statutes of limitations in place in many states, there is even successful tort reform which can provide comfort and ease of mind. Important considerations of securing a tail endorsement is the malpractice insurance version of having good credit.
Another reason to buy tail coverage is to know you have adequate insurance coverage in place for the defense and potential payment of a potential medical malpractice claim.
There is also often confusion about contractual agreements stipulations, requirements between a Physician Group and the doctor with regard to purchasing tail
If a physician leaves a group practice, that physician may have a contractual obligation to buy/pay for tail coverage upon departure and may not be aware of that obligation. Many physician employment agreements are either silent on or at best ambiguous about who bears the expense of malpractice tail coverage in the event a physician leaves a group.
The doctors Insurance Agency works with at least half a dozen secure experienced and committed Healthcare liability insurers who would consider reviewing your application and practice history in order to determine whether you qualify for a stand-alone tail quote.