Moving Forward With Confidence

As you make plans to start the next chapter in your business life, you may not be thinking much about the past. But the past can still have a big impact on your future; tail insurance is one way to reduce the likelihood that the impact will be negative.

What Is a Tail?

An insurance tail provides continued coverage for incidents and claims that would have been covered under your Errors & Omissions policy, but that are not reported until after that policy has ceased. Whether you are buying, selling or closing an agency, or putting new limits on the scope of your services, tail insurance can provide protection against potential legal fees and damages stemming from work completed in the past.

How Much Do You Need?

The size and length of tail coverage varies significantly; there is no one standard accepted level of coverage. However, it’s wise to keep the following in mind:

  • buy as much coverage as you can reasonably afford
  • if you are buying an agency, make sure the seller has at least 3 years’ tail coverage
  • purchase a policy that is bilateral, so that you have coverage whether you or the carrier
  • cancels for any reason other than default

Work with your insurance agent to determine the scope and length of policy that’s right for you. By extending your coverage for past work, tail insurance helps you to keep your focus firmly in the future.