What Is It?
Many healthcare professionals have questions about what medical malpractice tail coverage is and when it is necessary to have it. A simple definition of tail coverage or extended reporting endorsement is:
A malpractice insurance rider or supplement to a claims-made policy that provides coverage for an incident that occurred while the insurance was in effect but was not filed by the time the insurer-policy holder relationship terminated.
As an example: you buy a claims-made policy in 2014. You terminate the policy in 2017 and buy the tail. The tail allows you to report claims that are brought against you after you drop the policy, as long as the episode happened while you were insured from 2014 to 2017. Tail coverage is offered when a physician or group has not renewed or has cancelled a claims-made policy. There is a small window of time for the policyholders to accept or reject the offer.
Until recently, physicians have had to purchase tail coverage from their current insurance carrier, regardless of the premium charged. Now, insurance carriers also offer physicians various tail coverage options, including purchasing limited term tail coverage as opposed to the standard unlimited term. In some cases they are also now offering lower limits of liability. Whether coverage is purchased from the current insurance carrier or from a new company, tail coverage provides protection for claims of medical malpractice that occurred while a claims-made policy was in effect, when these claims are made after the cancellation or expiration of that policy.
When Do You Need Medical Malpractice Tail Coverage?
Tail medical malpractice insurance coverage is usually recommended when a physician is leaving a practice and going to a new job that will not offer insurance to cover a claims-made or a current policy. Physicians leaving one state and going to another state to join a private practice usually have to purchase tail coverage because different states may have different liability coverage. Also, many physicians going to work for hospitals may need to purchase tail coverage because most hospitals’ health systems are self-insured and do not provide the new physician with tail coverage. The only time a physician does not need to purchase tail coverage and can get it free is when he/she is retiring, in the case of death or disability, or if a new employer or insurance carrier provides it for them.
Please contact eQuoteMD for any further information on tail coverage for you or your group. We are happy to explain further or get you a quote!