Every lawyer, doctor and nurse knows a little something about professional liability tail coverage. But no one knows everything about this smart policy that protects professionals from potential lawsuits even after their original liability coverage expires. Here are X things everyone should know.
Is It Really Called Tail Insurance?
Many medical and legal professionals may not recognize tail insurance by its technical name, so if you encounter an Extended Reporting Period policy, know that you’re talking about tail coverage. Though it is often called an insurance product or policy, it is actually an endorsement tacked on to the end of a malpractice policy, hence the nickname. An endorsement is an addition to an existing insurance contract.
How Long Does Tail Coverage Last?
The length of protection provided by tail coverage can vary. Typical endorsement lengths are two, three, five and 10 years. It is possible to get perpetual coverage, as well, protecting a policyholder indefinitely.
How Much Does Tail Coverage Cost?
Tail coverage can be expensive. Typical costs range from 150 percent to 300 percent of the underlying premium. Each insurance company determines rates differently, so to get the best idea of what it could cost, consult with the malpractice insurance company. Note that many standard malpractice insurance policies include a free tail for disability, death and retirement.