Tail insurance coverage extends the reporting period on your E&O or malpractice policy. If you’re not renewing your claims-made policy, you may want to consider this coverage to protect your financial assets in case a claim is made against you. Your insurer may offer a tail policy when you end your claims-made policy. Here are three questions to ask:
How many years does the tail policy cover?
The tail policy extends the time that a claim can be brought against you. Most tail policies have limits, 2, 3 or 5 years, but the time period can also be “perpetual.”
How long do I have to purchase tail insurance coverage after cancelling the E&O insurance?
You may only have 20 to 30 days to use the tail quote that is offered. You should not wait too long to decide.
If there a free tail for death, disability or retirement? What are the requirements?
Make sure you understand the requirements and the limits of tail insurance coverage offered by the insurance company. You may want to purchase an extension of the coverage if it’s only for one to two years.
Ask About Tail Coverage
Don’t let your E&O policy lapse by not paying the premium and expecting to get tail insurance. You should talk to your insurance provider about purchasing tail insurance before you cancel the policy to make the most of it.