Tail coverage

Tail coverage is a type of insurance that is designed to cover claims arising before the termination of a claims-made insurance policy, but which are reported afterwards. For example, a doctor takes out a malpractice claims-made policy that covers the period from January 1 to December 31, 20X1, and which contains tail coverage for an additional year. The doctor does not renew this coverage. A problem occurs during a surgery in October of 20X1, and the patient sues the doctor in the following February. The tail coverage will cover the doctor's losses for this claim. Another surgery problem arises in March of 20X2, but it is not covered by the tail coverage, since it arises after the coverage period.

Tail coverage has traditionally been offered as an extended reporting period endorsement by the current insurance carrier, but may also be available as a stand-alone tail policy from other insurance carriers.

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