If you don’t work in either the medical or legal industries, you might ask yourself, “What is tail insurance?” And you might wonder if the policy is something you should look into as well.
Put simply, unless you are a doctor, nurse or lawyer, you likely won’t encounter tail coverage in your professional career. Tail insurance provides liability protection for professionals once their traditional policy passes its expiration date. Often tied to malpractice and errors and omissions coverage, tail coverage doesn’t replace an existing liability policy and it is not an extension of the policy. It is a product all its own.
How Tail Insurance Protects Policyholders
Tail insurance allows policyholders to submit a claim after the original liability policy expiration date and enjoy the benefits of the original policy. It protects insureds if a client files a lawsuit claiming negligence sometime after the original policy’s expiration.
For example, if a lawyer was covered by an errors and omissions policy throughout 2019 and then learns that a client was filing a lawsuit against him in 2020, if he let his policy lapse or felt he no longer needed coverage, the lawyer could face serious financial troubles. If the lawyer purchased tail coverage, however, he would retain the benefits of the original policy, even if he was retired and no longer practicing.