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What is Tail Coverage?
Optional Extended Reporting Period Coverage, more commonly known as Malpractice Insurance Tail Coverage. is an insurance product purchased so that liability coverage extends beyond the end of the policy period of your claims-made medical malpractice insurance coverage.
When practicing medicine under a claims-made insurance policy (by far the most common form of medical liability coverage), your insurance company is only obligated to pay claims received during the effective policy period. Because a medical injury can take months, even years to reveal itself, you can have a claim filed against you well after the policy you were practicing under has expired, been cancelled or non-renewed. Under such circumstances, you will need Tail Coverage to protect against those claims not known about at the end of the policy period.
Tail Coverage Scenarios
Scenario No. 1: After practicing at a five-person nephrology clinic in Ohio. you have taken a new job in Pennsylvania. Because your current medical malpractice insurance carrier doesn’t write policies in the state where you’ve relocated, you cancel your policy and sign on with another insurer. Two years later, a claim is filed against you for an incident that took place while you were practicing in Ohio. You’ve had uninterrupted insurance, so you should be covered, right?
Scenario No. 2: You have practiced family medicine for 40 years and are ready to retire. After selling your practice, you allow your medical liability insurance policy to lapse and spend your days down at the local fishing hole. Eighteen months later a malpractice claim is filed against you. You paid for malpractice insurance every year for 40 years, so you should be covered, right?
Scenario No. 3: The trend toward hospital-based employment finally lured you away from your independent gastroenterology practice. One of the new perks is that the hospital will coordinate and pay for your medical liability insurance coverage. Your new coverage starts the day your old coverage
expired. There has been no gaps in your coverage, so you should be covered, right?
Answer: The answer to the above three scenarios is, Only If You Purchased Tail Coverage!
Tail Coverage is important because so many medical malpractice insurance claims are made months after the patient interaction occurs, and some may even be made years after the interaction. Even if your insurance policy was active while you were treating the patient, if a claim is brought against you after you have let your coverage lapse, it will not be covered. Purchasing Tail Coverage is the best, safest way to protect yourself against claims that may arise after the cancellation or non-renewal of your policy.
Myths about Tail Coverage
Myth No. 1: You can only purchase Tail Coverage from your existing claims-made insurance carrier. There is a number of “A Rated” insurance companies that are now willing to write Tail Coverage for physicians leaving another company. We can shop your Tail Coverage among these companies, insuring you get the best possible price.
Myth No. 2: You only have 30 days from the date your coverage ends to purchase Tail Coverage. There are strict deadlines for purchasing Tail Coverage, but they vary from company to company. Let your medical malpractice insurance agent know in advance of your career plans, but don’t be pushed into making a purchasing decision prior to exploring your options.
Myth No. 3: You have to purchase lifetime Tail Coverage. While you can purchase Tail Coverage that has no end date, many companies offer one-year, three-year, five-year or seven-year Tail Coverage policies. These finite Tail Coverage policies are generally less expensive than the lifetime policies. If you live in a state with a strong statute of limitations on medical malpractice insurance claims, these finite Tail Coverage policies can save you money without sacrificing peace of mind.
This write-up for Tail Coverage was put together by Michael Matray. the Editor of the Medical Liability Monitor