Medical Malpractice Insurance Quotes from Every Major Carrier
Medical Malpractice “Tail” Coverage
Medical Malpractice “Tail” Coverage
What is Malpractice Tail Coverage?
Malpractice Insurance Tail Coverage (Optional Extended Reporting Period Coverage), is insurance that provides liability coverage beyond the end of the policy period of your claims-made medical malpractice insurance coverage.
A claims-made insurance policy is only obligated to pay claims received during the effective policy period. Claims- made insurance policies are the most common form of medical liability coverage for medical practitioners. Medical injuries can take months, even years to reveal themselves. Medical malpractice claims can be filed against you well after the policy you were practicing under has expired, been canceled or non-renewed. In these circumstances, tail malpractice insurance provides protection against those claims not known about at the end of the policy period.
Why Do You Need Malpractice Tail Coverage?
Tail malpractice coverage provides protection after your claims-made policy has ended. There are several reasons for switching or ending medical malpractice insurance plans including:
- Changing practices
- Leaving a hospital career or independent group practice to start your own practice (or vice versa)
- Change of employment from one hospital or group practice to another
- Merging practices
Each one of these life events would need and benefit from tail malpractice coverage.
How Much does Tail Malpractice Insurance Cost?
The cost of tail coverage for physicians is typically 200% of the annual premium at your malpractice policy’s end date. This can vary from company to company but is the general rule of thumb. Make sure the malpractice insurance agency you select has access to every major malpractice insurance carrier in your state.
For example, if a general surgeon in Philadelphia is paying $75,000 for their current malpractice policy and wanted to buy tail coverage, they could estimate their tail quote to be roughly $150,000.
While this is the general rule, that does not mean that it is impossible to save on your tail coverage.You can save money on tail malpractice insurance. Physicians can save money on their tail malpractice coverage by having an independent insurance agent shop their coverage. We here at Cunningham Group are independent insurance agents that specialize in malpractice, you can also find other insurance agents.
How Can I Get Malpractice Insurance Tail Coverage?
Tail coverage is usually offered by the insurance company your current policy is with. This tail coverage quote will cover you if there are any claims filed after your claims-made malpractice policy expires but occurred while the policy was active. What most physicians don’t realize is that other financially reputable insurance companies can offer you coverage that will cover you for your expiring policy. This is why it’s important to reach out to an independent agent and get quotes from every company that can cover you. This is what we do here at Cunningham Group, the medical malpractice insurance specialists.
Myths about Tail Coverage
Myth No. 1: You can only purchase Tail Coverage from your existing claims-made insurance carrier. There are a number of “A Rated” insurance companies that are now willing to write Tail Coverage for physicians leaving another company. We can shop your Tail Coverage among these companies, ensuring you get the best possible price.
Myth No. 2: You only have 30 days from the date your coverage ends to purchase Tail Coverage. There are strict deadlines for purchasing Tail Coverage, but they vary from company to company. Let your medical malpractice insurance agent know in advance of your career plans, but don’t be pushed into making a purchasing decision prior to exploring your options.
Myth No. 3: You have to purchase lifetime Tail Coverage. While you can purchase Tail Coverage that has no end date, many companies offer one-year, three-year, five-year or seven-year Tail Coverage policies. These finite Tail Coverage policies are generally less expensive than the lifetime policies. If you live in a state with a strong statute of limitations on medical malpractice insurance claims, these finite Tail Coverage policies can save you money without sacrificing peace of mind.
Tail Malpractice Coverage FAQ
How much does tail malpractice insurance cost?
The cost of tail coverage for physicians is typically 200% of the annual premium at your malpractice policy’s end date. This can vary from company to company but is the general rule of thumb. This is why we always recommend physicians contact a malpractice insurance agency that has access to every major malpractice insurance carrier in their state.
Can I pay for my tail malpractice insurance coverage in installments?
Not typically. Some malpractice insurance carriers will allow you to pay in installments, but the majority will require full payment.
Can I buy malpractice tail coverage early or ahead of time?
No. Since there are so many variables that can occur while you are practicing (claims, license issues, etc.), the carriers only allow you to purchase tail malpractice coverage at the end of the policy so they can properly assess the risk. Another option is to consider occurrence coverage.
Will my employer provide tail malpractice coverage for me?
Not typically. The employer will pay for your malpractice insurance premiums while you are working for them, however, they will require you to be responsible for the tail at the conclusion of employment. Always make sure you select an agent that has access to all the major medical malpractice insurance companies in your state to ensure you get the best price with the best terms.
Do I have to buy tail malpractice coverage before I leave my current position?
No. You have anywhere from 30-60 days after the end of the policy to purchase tail coverage. However, we advise buying it as close to your policy end date as possible. This is due to the fact that if a claim is filed in this 30-60 day window, it may still be covered by your current carrier (you have a grace period), but your tail malpractice insurance rates will increase as there will be an open claim on your record.
Is purchasing tail malpractice coverage required?
No, however, it is HIGHLY recommended. You know your patients better than anyone else and if you want to take that risk it’s up to you. However, most standard malpractice insurance carriers require tail malpractice coverage to be purchased on all prior policies if they are to offer coverage. You may be limiting your options and paying higher premiums in the future by forgoing that tail coverage.
How do I get a Malpractice Tail Coverage Quote?
If you want to understand all of your options and get quotes from every major malpractice insurance carrier in your state, then fill out our form and let one of our veteran agents that specializes in your state help you through the process.
Do I need tail coverage?
Yes, tail coverage is critical in ensuring your work is covered after your policy cancels. It’s important to remember that when a claims-made policy (most common type of policy) comes to an end, and you don’t buy tail coverage, you will not have coverage in place if someone files a claim when that claims-made policy was active. This means you are on the hook for defending that claim, and that can be VERY expensive.
How long should tail coverage last?
While there are shorter tail options available, such as 2 or 3 three years, most tail coverage policies last a lifetime. Since malpractice claims can take years to be filed, we recommend physicians purchase lifetime tail coverage.
Who should pay for tail coverage?
The physician is typically responsible for buying their tail coverage policy unless the doctor negotiated it as a benefit with their employer prior to taking a job. Always try to negotiate tail coverage into your employment contract. It can save you a ton of money when you leave that job or the policy comes to an end.
How is tail coverage calculated?
Tail is typically calculated by doubling the expiring premium. Your expiring premium is typically the cost of your policy for the year it was canceled. For example, if a plastic surgeon in California paid $35,000 for their policy this past year, they could expect a tail policy cost of around $70,000.
When should I buy tail coverage?
You should buy tail coverage on the date — or just after — your policy ends. Most companies will typically give a short grace period of around 30 days after your policy ends to purchase tail coverage. Our advice is to buy tail coverage as close to the policy’s end date to avoid the potential for claims during the grace period being disputed.
Is prior acts coverage the same as tail coverage?
No. Prior-acts coverage comes when you renew your policy. It indemnifies your previous years (prior acts) as well as your new policy moving forward. Ultimately, every physician will have to purchase a tail coverage policy at some point in their career.
Which doctors pay the most for tail coverage?
We typically see surgeons and obstetricians paying the most for tail coverage. This is because they are higher-risk specialties with higher annual premiums.
Tail Coverage Scenarios
Scenario No. 1: After practicing at a five-person nephrology clinic in Ohio, you have taken a new job in Pennsylvania. Because your current medical malpractice insurance carrier doesn’t write policies in the state where you’ve relocated, you cancel your policy and sign on with another insurer. Two years later, a claim is filed against you for an incident that took place while you were practicing in Ohio. You’ve had uninterrupted insurance, so you should be covered, right?
Scenario No. 2: You have practiced family medicine for 40 years and are ready to retire. After selling your practice, you allow your medical liability insurance policy to lapse and spend your days down at the local fishing hole. Eighteen months later a malpractice claim is filed against you. You paid for malpractice insurance every year for 40 years, so you should be covered, right?
Scenario No. 3: The trend toward hospital-based employment finally lured you away from your independent gastroenterology practice. One of the new perks is that the hospital will coordinate and pay for your medical liability insurance coverage. Your new coverage starts the day your old coverage expired. There has been no gaps in your coverage, so you should be covered, right?
Answer: The answer to the above three scenarios is, Only If You Purchased Tail Coverage!
Tail Coverage is important because so many medical malpractice insurance claims are made months after the patient interaction occurs, and some may even be made years after the interaction. Even if your insurance policy was active while you were treating the patient, if a claim is brought against you after you have let your coverage lapse, it will not be covered. Purchasing Tail Coverage is the best, safest way to protect yourself against claims that may arise after the cancellation or non-renewal of your policy.