What is Tail Coverage?
Tail coverage refers to an extension period of insurance coverage for medical malpractice. From the word “tail”, this type of insurance serves as the “tail” or insurance coverage at the end of a normal medical malpractice policy. An end to a normal medical malpractice insurance coverage may result due to cancellation by the physician who availed the policy or may be due to a change of insurance provider. A particular physician for example may choose to leave his medical practice and choose to work in another field which would make him/her cancel his insurance policy for medical malpractice. And for some, insurance premiums may be more attractive with other insurance providers and so these physicians may switch and choose another insurance provider for his/her medical malpractice coverage.
The thing about medical malpractice lawsuits is that cases may not be filed immediately after a particular medical procedure. Some cases may take weeks, months, or even years before something is filed against a particular physician. Granting that a particular physician has medical malpractice insurance coverage up to end of June of a given year and a lawsuit is filed after June for a supposed medical malpractice incident that occurred in January of the same year, the involved physician in this case is not covered by his own malpractice policy. Whether the physician cancelled his/her policy or switched insurance providers which made his/her coverage expire by June of a given year, he/she will receive no medical malpractice coverage afterwards. It is during these times that some physicians choose to have an extension of their normal insurance coverage to cover lawsuits filed after a policy is cancelled or switched to another provider.
Most tail coverage policies are very expensive and could reach up to 200% more than the standard medical malpractice insurance policy. And since this type of policy is restrictive in nature and very expensive, most companies that hire doctors have this kind of issues settled and discussed at the start of employment.