Definition of Tail Insurance

Doctors who have claims-made malpractice insurance often buy tail insurance for additional coverage.

Medical malpractice lawsuits are a major risk for physicians. Fortunately, most hospitals or medical groups offer medical malpractice insurance policies. However, many physicians who have claims-made insurance choose to also purchase "tail insurance" to give them additional coverage.

Claims-made Insurance

There are two types of malpractice insurance: occurrence-made and claims-made. Occurrence-made insurance covers physicians with insurance at the time the incident happens. However, claims-made insurance only insures physicians if they have the same insurance at the time of the claim as they did at the time of the incident.

Benefits

If physicians have claims-made insurance, they often choose to purchase tail insurance when they leave a medical practice to go to another practice. Though their new practice will probably also give them malpractice insurance, the new insurance would not cover them for recent claims made on past incidents.

Costs

For physicians who become disabled, retire or die, their insurers normally provide tail coverage at no cost. However, if physicians need tail insurance under any other circumstances, it usually costs about 200 percent more than their medical malpractice premium.

References

• MedScape: Your Malpractice Advisor: Tail Coverage Dangers
• American College of Physicians: Malpractice Insurance