Tail Coverage

What is Tail Coverage and how does it protect me:
Tail Coverage Claims Made:

CLAIMS MADE COVERAGE

Claims Made Policy Summary — The claims made policy protects you against incidents that arise from treatment provided after your policy’s retroactive date and are reported while your policy is in force. Your retroactive date usually reflects the date your policy started. As long as you continuously renew your claims made policy, you may report claims for incidents that occurred in previous policy years, back to the beginning of your claims made coverage.

Example of Claims Made Policy Coverage — You became a Claims Made policyholder in 1995 and have renewed your policy continuously since then, with no lapse in coverage. A patient you treated in 1997 files a claim against you now. Because you have renewed your policy continuously since 1995 and it is currently in force, you are still protected for that 1997 incident.

Benefits

1. With a Claims Made policy, the only insurance carrier you need to be concerned with is your current carrier. Instead of being sued and trying to figure out which former occurrence policy was covering you the year incident occurred and hoping that carrier is still financially viable to defend your claim, all claims brought are handled by your existing Claims Made policy regardless of when the incident occurred, pursuant to your retroactive date.
2. The premiums in the initial years of a Claims Made policy are generally less than those of an Occurrence policy offering similar coverage. In general, a Claims Made policy will save you money over an Occurrence policy after just three years.

Limits of Liability — With a Claims Made policy, the limits of liability in effect when the claim is made are the limits that apply toward any settlement or judgment.

Example of Limits of liability — In 1995 your Claims Made policy had limits of liability of $100,000/$300,000. Then, in 1998, you increased your limits to $1 million/$3 million. Also in 1998, a patient you treated in 1997 files a malpractice claim against you. Which limits of liability apply? The $1 million/$3 million limits of the current policy year apply because those are the limits in place when you reported the claim.

Tail Coverage Occurence Made:

OCCURENCE COVERAGE

Occurrence Policy Summary — The Occurrence policy protects you against incidents that occur while the policy is in force, regardless of when the claim is reported.

Example of Occurrence Policy — You became an Occurrence policyholder in 1994, and discontinued the policy in 1996. A patient you treated in 1995 files a malpractice claim against you now. Because the patient was treated while the policy was in force, you’re able to report the claim in 1998 for that 1995 incident.

Benefits — This policy automatically protects you both now and in the future for any incidents that occurred while you were a policyholder. This means that you can report claims:

1. During the current policy year, and
2. After your policy has ended.

Limits of Liability — With an Occurrence policy, the limits of liability in effect when the treatment (prompting the claim) occurred are the limits that apply toward any settlement or judgment costs.

Example of Limits of liability — In 1993 your Occurrence policy had limits of liability of $100,000/$300,000. Then, in 1998, you increased your limits to $1 million/$3 million. Also in 1998, a patient you treated in 1994 files a malpractice claim against you. Which limits of liability apply? The $100,000/$300,000 limits of the 1994 policy year apply—because those were the limits in place when the treatment prompting the claim occurred.

Tail Coverage — Tail coverage is unnecessary if you discontinue this policy because the cost of extending your claims reporting period is built into the annual premium.