Tail Coverage
Tail coverage, or extended reporting endorsement, is the name of an endorsement that is added to a claims-made policy in order to extend the coverage to cover claims that may be filed after the policy is cancelled. The extended reporting endorsement, or tail coverage, is offered as an option in your medical malpractice insurance for additional premium.
Summary of Medical Malpractice Tail Coverage
Tail coverage only applies to medical professional liability claims-made policies – not occurrence policies. When a claims-made policy is cancelled or non-renewed by a physician or group, the medical malpractice insurance company will offer a tail insurance quote. Policyholders will then have a limited amount of time to elect or reject the endorsement.
Liability Limits for Tail Coverage
The liability limits offered for tail insurance are typically the same as the original medical malpractice claims-made policy. So, if the underlying policy has limits of $1M/$3M, the tail coverage quote would be offered at those limits. However, it is possible in some cases to purchase a different limit, which can provide premium savings. Limits vary by state and/or hospital requirements, but are usually available at:
- $200,000/600,000
- $500,000/$1,000,000
- $1,000,000/$1,000,000
- $1,000,000/$3,000,000
Provisions for Free Tail Insurance
Most claims-made policies have a provision for a free tail insurance in the case of death, disability, or retirement, provided the physician has been insured with the medical malpractice insurance company for a certain length of time, which is usually 3 – 5 years, and has reached retirement age.
When is Tail Coverage Not Offered?
Medical malpractice insurance companies do not offer tail coverage if the policy has been cancelled for non-payment.
Definitions
ERP extends the claims-reporting provisions for a specific time period beyond the policy expiration date, for any claims arising from incidents that occurred after the retroactive date and prior to the expiration of the policy. Also called tail coverage (see below).
An endorsement added to a claims-made policy when cancelled or non-renewed to extend the time claims may be reported. The technical name for tail coverage is “Extended Reporting Endorsement,” or “Extended Reporting Period” (ERP).
Coverage for claims that are made after the effective date of a claims-made medical malpractice insurance policy but that arise out of events that occurred before the policy effective date and after the policy Retroactive Date.
The date that an event, act, or omission must have occurred to be eligible for coverage under the claims-made malpractice policy. The retroactive date is carried over from one claims-made policy to the next if coverage for prior acts is included.
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