More often than not, if you are a business professional, especially if you are a physician or lawyer, you will come across the term tail coverage. If you are not familiar with this useful insurance product, you will certainly ask, “What is tail coverage?”
Tail coverage allows professionals to file claims after a standard policy has expired or is cancelled. It is an added premium rather than new coverage, and as such, there are three important things those who invest in tail coverage should remember.
1. It Only Applies to Specific Coverage
Tail coverage is a product option you can add, like a tail, to an existing policy. The coverage allows you to file a malpractice claim as long as the services in question took place during the original policy period.
2. It Only Applies for a Limited Time
Most tail coverage is added for a limited time after the standard policy. A year is standard. Remember that you cannot file claims once tail coverage expires.
3. It Doesn’t Protect You For Work During the Tail Time Period
Don’t make the mistake of thinking your tail insurance will cover any work you may conduct during the time your tail is in effect. Tail coverage is not an insurance policy. It is a benefit that allows you to file a claim for work done during the original policy period.