What is a tail?
In most claims-made policies a tail is called an “extended reporting endorsement” which, as it implies, allows claims to be reported to an insurer beyond a policy termination date. When a claims-made policy is terminated, there are two ways to handle the coverage without exposing the physician to an uninsured claim. The first way is to purchase a tail to complete the existing claims-made coverage. The second method is to purchase a replacement policy that includes coverage retroactively back to the same date as the previous claims-made policy. Selecting either option would still provide coverage so that if a claim is subsequently made there would be a policy to respond to the claim. Normally the preferred way to change companies is to replace the coverage with a policy that has the same prior-acts coverage and not purchase a costly tail. On average tails cost twice your annual premium, unless you are receiving a special discount, such as a new practitioner credit, in which case your ta
Tails can be quite complicated. Extended Reporting Periods are known as tails. Because a tail is an extension of your existing policy, it can only be purchased from your current insurance carrier. An ERP tail permits an attorney to report to his former carrier any claims which occur after his/her policy has expired, since the coverage goes back to the date specified as the prior acts date or date of inception on the policy. The extent of tail coverage varies greatly among insurers. For example, some insurers offer ‘unlimited’ tail coverage, while others only offer coverage for one year into the future. The ERP premium is a percentage of the premium charged for the last policy year. The percentages vary with the length of the ERP, culminating in an unlimited ERP, which can cost up to 300% of the premium for the last policy year. Because tails can be used as a means to reduce future policy costs, you should talk to your insurance broker about how best to utilize this option. Tails are al
