At first glance, you might think tail insurance has something to do with pet insurance. You might be surprised to learn it is an insurance product covered by medical and legal professionals. It is a policy that protects them from liability even after their initial coverage has expired.
Tail insurance is an add-on of sorts that doctors, nurses and lawyers can purchase to supplement their traditional malpractice or errors and omissions coverage. The tail insurance policy takes effect after the original policy has expired – on the “tail end” of the coverage, one might say.
During the tail policy period and after the original policy has expired, professionals are fiscally protected if a former client claims malpractice or negligence and sues. The only hitch is that service the former client is complaining about must have occurred during the original coverage period.
How Tail Insurance Works
To get an idea of how tail insurance works, think of a doctor with a malpractice policy that expires in December 2019. While the policy is in effect, if a patient decides to sue her, she is protected financially. If the lawsuit comes in January 2020, after the policy expired, the doctor could be in trouble. Not if she has tail insurance.
With tail coverage, she enjoys the same protection as her original policy. She can file a malpractice claim and remain protected.