While the high price of medical malpractice insurance premiums is enough to give most physicians sleepless nights, the problem can become even more pressing should you need to purchase tail coverage. In the past, it was common for tail insurance premiums to be anywhere from two to four times as high as standard malpractice premiums. However, this is no longer always the case, as many insurance carriers are beginning to offer a range of tail insurance options that ensure you have the coverage you need without having to fork over a fortune to get it.
What Is Tail Coverage?
Tail coverage is a specific type of insurance that provides extended coverage for a claims-made policy, allowing the insured individual or facility to make a claim for an act covered under the policy even after the policy is expired or canceled. If your claims-made policy is expiring or you’re canceling it for any reason, purchasing the optional tail coverage ensures all procedures covered under the existing policy continue to be covered should a patient file a claim down the road. Without this tail insurance, your coverage ends the day your policy expires or is canceled, meaning you could be left to pay any malpractice settlements out of your own pocket.
Tail Coverage Options
For many years, physicians wishing to purchase tail coverage had only one option, which was to purchase this additional coverage from their current insurers — often at exorbitantly high premiums. As physicians were essentially left captive with no other options, insurance carriers were free to charge whatever they wished. Luckily, you now have a range of options for tail insurance. By shopping around, you may find a number of stand-alone tail policies from other insurers that charge lower premiums than those your current carrier offers.
Finding the Best Rates
The fact that health care providers are no longer forced to buy their tail coverage from their current insurers is great news, as it means you can compare the premiums of the standard tail coverage your current insurer offers with the rates of the various stand-alone tail policies to find the best deal. In addition, you may be able to lower the costs of your premiums even further by choosing a plan with lower limits of liability or by purchasing limited-term coverage instead of the standard unlimited-term tail coverage. Nonetheless, it’s important to seek out legal advice and thoroughly read through your employment contract and hospital by-laws to ensure the coverage you choose fulfills any contractual obligations you may be under.
Understanding the Importance of Tail Coverage
As it may take several years from the time a procedure is performed until a patient files a malpractice claim, tail coverage is vital to ensure all work performed under your old policy is still covered in the future. For instance, if your old insurance policy was valid from 2012 to 2016, and a patient decides to file a medical negligence claim against you in 2017 for a procedure done in 2015, your tail insurance still covers this claim. However, if you decline to purchase the tail coverage, any claims filed after the date your coverage expired is solely your responsibility.
Who Needs Tail Coverage?
Tail coverage is only ever necessary in the event that your current insurance is being canceled or is expiring, such as when moving to a new private practice or hospital. Even then, it’s not always required. This is because your new insurance carrier may be able to offer you “nose coverage” with your new policy to cover all prior acts. However, if you’re moving to a new state, it’s likely you need to purchase tail coverage, as many insurance carriers cannot or are unwilling to provide coverage for prior acts committed in a different state. Most hospitals and health systems require physicians to have tail insurance prior to employment as well.
Malpractice insurance is of vital importance to any healthcare provider. Should you ever be unlucky enough to have a malpractice claim filed against you, you’ll immediately realize those high premiums you’ve been paying were more than worth it. Nonetheless, there’s still no reason for you to pay more for your insurance than necessary. For this reason, you should do a bit of research and compare your options in case you need to purchase tail coverage.