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tail coverage

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  • tail coverage

    Can someone explain tail?

    If you leave a group and the group is paying for your 'tail coverage', is that a one time lump payment for the premium and that's it?

    If you leave a job Dec 1, 2021 and there's a lawsuit on you from a case that occurred July of 2021 and was filed on Dec 3, 2021, I assume the 'tail pays for it'??

    And how long does a tail continue? If you get sued in 2024 for something you did in July of 2021? Does the tail cover that?

    Thanks for any education.

  • #2
    You are talking about “claims made” policies:

    Yes, the tail insurance is usually paid as a lump sum to cover legal actions that are brought after the period in which you were actively working an covered by the plan. Yes, the tail coverage is for an unlimited/indefinite period after the active policy is terminated. What is not widely known is that a tail policy can be underwritten by a different insurance company (than the company that insured you when you were actively working for the practice that you departed) and may be shopped around separately.

    The cost of a med mal tail policy is typically in the ballpark of 2-3x your annual payment for a mature policy, but this varies by company, specialty, state/locale, insured’s history, etc.