Frequently Asked Questions – Tail Coverage for Medical Malpractice Insurance

• How much does tail coverage typically cost for physicians?

  Tail coverage typically costs approximately twice your final annual premium, though this can vary based on your specialty and claims history. For example, if a general surgeon paying $75,000 annually for malpractice insurance would expect tail coverage to cost around $150,000. Working with an independent broker who has access to multiple carriers can help you find competitive rates and potentially reduce these costs. Use our tail coverage calculator for a personalized estimate.

• Why is tail coverage so expensive compared to regular malpractice insurance?

  Tail coverage is expensive because it provides indefinite protection for all incidents that occurred during your active policy period, potentially covering claims filed years or even decades later. The insurer assumes all future liability risk for your past work in a single payment, which explains the higher cost. However, when you work with a malpractice insurance agency like Cunningham Group, you get the advantage of a team with access to every major malpractice insurance carrier in your state, which can help you find more competitive rates.

• Are there ways to reduce the cost of tail coverage?

  Yes, you can potentially reduce tail coverage costs by:

  • Working with experienced brokers like Cunningham Group who assess your needs, shop multiple carriers, and negotiate favorable terms
  • Some insurers offer “free tail” provisions after you’ve been with them for a certain number of years, typically 5-7 years, or if you retire at a certain age
  • Choosing a shorter coverage period if appropriate for your risk profile
  • Timing your transition strategically to qualify for free tail if available”

• Can I pay for my tail coverage in installments?

  Yes, some insurance companies offer payment plans for tail coverage, allowing you to spread the cost over time rather than paying the full amount upfront. This can make the typically high cost (around 2x your annual premium) more manageable. Contact your carrier or broker to discuss available payment options and terms.

• What exactly does tail coverage protect me from?

  Tail coverage protects you from malpractice claims filed after your claims-made policy ends, but only for incidents that occurred while the policy was active. This includes claims from complications that surface months or years after treatment, patient allegations of negligence from past procedures, and even cyber-related malpractice claims involving data breaches during your coverage period. It essentially extends your reporting period indefinitely for past work.

• What’s the difference between Claims-Made and Occurrence?

  There is always confusion regarding claims-made and occurrence coverage types. This table helps break it down:
  

  Claims-Made Coverage

  • Claims Covered: Only while the policy is active

  • Requires Tail? Yes, when leaving

  • Typical Cost: Lower annual premium

  • Who Uses It: Most private practices and hospitals

  Occurrence Coverage

  • Claims Covered: Covered no matter when the claim is reported

  • Requires Tail? No tail required

  • Typical Cost: Higher annual premium

  • Who Uses It: Hospital-employed physicians and outpatient clinic contracts

   

• Do I need tail coverage if I’m switching to a new malpractice insurance carrier?

  Yes, you typically need tail coverage when switching carriers because most malpractice policies are “claims-made,” meaning they only cover claims reported during the active policy period. Without tail coverage from your previous carrier, you’d have no protection for claims arising from your past work under that policy. Your new policy will only cover incidents occurring after its effective date, creating a dangerous coverage gap.

• How long should my tail coverage last?

  The ideal tail coverage duration depends on your specialty, state statute of limitations, and risk tolerance. Lifetime (unlimited) tail coverage offers the most comprehensive protection and is generally recommended for high-risk specialties like surgery or obstetrics. Shorter periods (2-3 years) might suffice for lower-risk specialties or physicians near retirement, but carefully consider your state’s laws regarding when malpractice claims can be filed. Note that surplus lines companies may limit tail coverage to 12 months to 3 years.

• Is tail coverage automatically included in my malpractice policy?

  No, tail coverage is not automatically included in most malpractice policies—this is a common myth. Most policies are “claims-made,” covering only claims filed during the active policy period. Tail coverage is an optional add-on that must be purchased separately, typically within 30-60 days of your policy ending, to extend protection for past incidents.

• When do physicians typically need to purchase tail coverage?

  Physicians need tail coverage when retiring from practice, switching from one employer or practice to another, changing malpractice insurance carriers, taking extended leave or sabbaticals, or closing a private practice. Any situation where your claims-made policy will end or change requires careful consideration of tail coverage to maintain protection for your past work.

• What happens if I don’t purchase tail coverage when leaving a practice?

  Without tail coverage, you become personally liable for any malpractice claims filed after your policy ends, even for care you provided while insured. This means your personal assets, including savings, investments, and property, could be at risk from lawsuits. Additionally, many hospitals and potential employers require proof of continuous coverage including tail coverage for past positions, so lacking it could impact your ability to secure privileges or new employment.

• Can I purchase tail coverage after my policy has already ended?

  Most insurers require you to purchase tail coverage within 30-60 days of your policy ending, though specific timeframes vary by carrier. Waiting beyond this window typically means losing the option to purchase tail coverage entirely, leaving you permanently exposed to claims from your past work. It’s crucial to make this decision promptly when your policy ends.

• Does tail coverage protect against cyber liability and data breach claims?

  Modern tail coverage policies often include protection for cyber-related malpractice claims, but coverage specifics vary by carrier. As healthcare data breaches become more common, ensure your tail coverage addresses potential claims from patient privacy violations or data security incidents that occurred during your coverage period. Review your policy carefully or consult with a broker to confirm cyber liability protection.

• Do I need tail coverage if my new employer says they’ll cover me?

  Even if your new employer provides malpractice coverage, this typically only covers incidents occurring after you join them. You still need tail coverage from your previous policy to protect against claims from your prior work. Some employers may pay for your tail coverage as part of recruitment packages, but verify this in writing and ensure the coverage meets your needs.

• Is tail coverage required by law or just recommended?

  While tail coverage isn’t legally required in most states, it may be mandated by hospital bylaws, employment contracts, or medical group agreements. Beyond requirements, it’s strongly recommended as essential protection for your financial future. Some states have specific regulations about offering tail coverage options, but purchasing it remains the physician’s choice.

• How do I purchase tail coverage for my malpractice insurance?

  To purchase tail coverage, contact your current malpractice carrier or work with an independent insurance broker before your policy ends. The process involves reviewing your current coverage and claims history, obtaining quotes for different coverage durations, and selecting appropriate limits and options. Working with Cunningham Group’s experienced brokers can help you compare options from multiple carriers and potentially save money – request your free tail coverage quote today.

• When should I start shopping for tail coverage quotes?

  Begin researching tail coverage options at least 3-6 months before you’ll need it, especially if you’re planning retirement or a job change. This timeline allows you to compare quotes from multiple carriers, understand your options fully, and potentially negotiate better terms. However, remember that you typically must purchase tail coverage within 30-60 days of your policy ending.