Tail Coverage in Florida

Your Guide to Post-Policy Protection

With physician movement and turnover increasing in recent years, there has been a growing need for more cost-effective stand alone tail policies options in Florida. As you may know, obtaining tail coverage can be very expensive, typically costing 200% of your expiring premium with your existing carrier. However, you should be aware that there are tail options in addition to your current carrier that could save you significant money on your tail costs.

Stand-alone tail coverage provides coverage for potential claims after the original malpractice insurance policy has been cancelled. It is essential to obtain quality tail coverage in order to ensure you are properly protected.

At PLI Consultants, our network of licensed agents in Florida can provide stand-alone tail coverage that could save you significant money on your tail costs without sacrificing quality of coverage. Our stand-alone tail carriers can offer “A” rated coverage, 10%-35% less than your existing carrier’s tail quote. We use our access to numerous stand-alone tail carriers across Florida to obtain multiple tail quotes and have them compete with each other in order to provide the most cost-effective solution available.

Before you simply purchase tail coverage through your incumbent carrier, make sure you are receiving the most cost-effective tail coverage available by contacting us today!

A common scenario requiring tail coverage is

A physician leaving employment with a group practice where coverage was provided by the group, but the physician is required to purchase tail upon departure.
A group practice that provides its physicians with coverage during employment and is obligated to purchase tail for a departing physician.
A physician who will be selling his or her private practice and no longer needs individual malpractice insurance coverage.
A physician who joins a hospital or group setting and no longer needs his or her own individual malpractice insurance coverage.

Understanding Tail Insurance in Relation to Claims-Made Policies

Key Features of Tail Insurance

Extended Reporting Period

Tail insurance provides an extended time frame during which you can report claims. This period can range from one year to several years, or even an unlimited period, depending on the terms of the policy.

Coverage for Past Incidents

It covers incidents that occurred while the original claims-made policy was in effect but are reported after the policy has expired.

Cost

The cost of tail insurance is typically calculated as a percentage of your last annual premium under the claims-made policy. This percentage can vary but is often around 200-250%.

Non-Cancellable

Once purchased, tail insurance cannot be canceled, ensuring continuous protection for the agreed-upon period.

When to Consider Tail Insurance

Changing Jobs: If you are moving to a new job and your new employer provides a different insurance policy.
Retirement: To cover any potential claims that could be made after you retire.
Switching Insurance Providers: When transitioning from one insurance provider to another, especially if the new provider does not offer prior acts coverage.

Example Scenario

Dr. Smith has a claims-made medical malpractice policy with a retroactive date of January 1, 2015. He decides to retire on December 31, 2023, and his claims-made policy expires on that date. In 2024, a patient files a lawsuit for an incident that occurred in 2022. Without tail insurance, Dr. Smith would not have coverage for this claim because it was reported after his policy expired. However, with tail insurance, he would be protected, as the tail coverage would allow him to report the claim even after the expiration of his original policy.

Conclusion

Tail insurance is an essential aspect of risk management for professionals with claims-made policies. It ensures that you remain protected against claims made after your policy expires, providing peace of mind and financial security. Understanding and securing appropriate tail insurance coverage is crucial for continuous protection in your professional practice.

Frequently Asked Questions (FAQs)

What is tail coverage?

Tail coverage is a type of insurance that provides protection against claims made after a malpractice policy has expired or been canceled, covering incidents that occurred during the active period of the original policy.

When do I need tail coverage?

Tail coverage is essential when you are switching jobs, retiring, or canceling your malpractice insurance, as it ensures you remain protected against claims made after your policy ends.

How long does tail coverage last?

Tail coverage typically lasts indefinitely, providing protection for any future claims related to incidents that occurred during the original policy period.

How can I save on tail coverage costs?

At PLI Consultants, we help you save 10%-35% on tail coverage costs by leveraging our network of "A" rated carriers to obtain multiple competitive quotes, ensuring you receive the best coverage at the most cost-effective price.

What is a Claims-Made Policy?

A claims-made policy is a type of professional liability insurance that provides coverage for claims made during the policy period, regardless of when the incident occurred, as long as it happened after the policy’s retroactive date. This means that if a claim is filed after the policy has expired or is canceled, it will not be covered unless tail insurance is in place.

What is Tail Insurance?

Tail insurance, also known as an extended reporting period (ERP) endorsement, is an add-on to a claims-made policy that allows the insured to report claims after the original policy has expired. It essentially extends the time period during which a claim can be made for incidents that occurred while the claims-made policy was active.

Why is Tail Insurance Important?

Without tail insurance, any claims filed after your claims-made policy expires would not be covered, even if the incident occurred during the policy period. Tail insurance ensures that you remain protected against claims that might be reported after you’ve left a job, retired, or switched to a different insurance provider.

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