What is Tail Coverage?

tail coverage

If you don’t work in healthcare or legal services, the term tail coverage could sound strange. Is it in reference to the back of a vehicle? Does it have to do with animal insurance? What is it?

Tail coverage is more of a slang term used by insurers when referencing either malpractice insurance or errors and omissions coverage. The policy offers liability protection to medical and legal professionals after their traditional coverage expires. The product gets its name because it is added to the “tail end” of a standard policy.

How Does Tail Coverage Help Professionals?

Tail coverage allows policyholders to access the benefits of their original policy for an established time period after the policy’s expiration date. This comes in to play when a healthcare patient or legal client files a lawsuit claiming negligence after a professional’s insurance protection ends.

An Example of How It Works

Let’s say a doctor’s malpractice policy covers her through the end of the year. From now until the end of the year, she is protected financially and professionally if a patient claims negligence and files a lawsuit. If the patient files that claim after the end of the year, when the policy expires, the doctor is not covered and is at personal and professional risk.

If the doctor has tail coverage, however, she remains protected. She can file a malpractice claim and receive the same benefits she did when her policy was active.