2024 Physician’s Guide to Tail Insurance

Are there alternatives to tail coverage?

Instead of buying a tail, physicians can opt to maintain prior acts coverage which extends back to the retroactive date of the claims-made policy, or they can renew the current policy with retroactive coverage. However, new employee contracts often prohibit these options to avoid assuming risks from the physician’s previous employer. Additionally, the former employer’s contract might require a true “Tail Policy” rather than including nose on the new policy, since tail is final and prior acts coverage must be maintained year after year.

Are nose coverage and prior acts coverage the same thing?

Yes, “prior acts” and “nose” are interchangeable. These terms refer to a policy that covers the new coverage going forward and the prior period. Since this is very important, you should only trust an experienced medical malpractice insurance broker.

What is the difference between prior acts coverage and tail coverage?

Tail coverage is an endorsement, or standalone policy, that protects against any future claims that occurred during the doctor’s previous employment.

Prior Acts coverage is not a standalone policy but can be included in a claims-made policy. It modifies the retroactive date to ensure the doctor’s “prior acts” at a previous employer are still covered. However, this option is not always available.

How is occurrence-form coverage different from tail insurance?

With an occurrence policy, doctors are protected from any incidents during the policy term, no matter when the claim is submitted.

• Occurrence coverage provides lifelong coverage and is more expensive upfront.
• Tail coverage can offer lifelong protection if a doctor selects an unlimited-length term. While not all states or practice types qualify for occurrence coverage, tail coverage is available to all physicians who have active claims-made coverage. The duration of the tail coverage available depends on the carrier and specific risk.

If I have occurrence coverage, do I need to buy a tail?

No, occurrence coverage does not require a tail. Tail coverage is only necessary for claims-made, or claims-paid, forms of malpractice insurance.

How much does tail coverage cost?

Tail insurance costs approximately 200% of the expiring claims-made premium. For example, if you pay an annual premium of $40,000, your tail coverage would cost around $80,000. Since rates vary widely by specialty, location, and individual risk factors, we recommend you contact us for a personalized tail evaluation. While many doctors accept the first tail quote they are given, those who work with MEDPLI often save thousands of dollars.

Who pays for malpractice tail insurance, me or my employer?

This depends on the employer and your contract. If your contract stipulates that you are responsible for paying your tail, you should contact us immediately. If your employer is responsible, just be sure you get proof of coverage in writing before parting ways. For your next job, be sure to factor the cost of the tail into the equation so you’re not surprised by an unforeseen expense.

Can I buy tail coverage from my employer’s carrier?

Yes, but you’ll often pay more than necessary when you buy the tail offered through your employer’s insurance company. Instead, you can hire MEDPLI to shop the standalone tail market for the best deal. We work with A-rated carriers to deliver the malpractice protection you need at more affordable rates.

How is tail coverage calculated?

Traditional tail coverage premiums generally equate to 200-300% of the expiring annual claims-made policy premium. A physician’s rate also considers geography, specialty, and claims history. Each carrier utilizes a proprietary algorithm to assess these factors so expect rates to vary widely among carriers.

Who pays the highest malpractice insurance?

Malpractice premiums typically correspond with the physician’s specialty and its risk profile. Surgical specialties with the highest-risk profiles pay the highest malpractice premiums. These specialties include neurosurgeons, OBGYNs, general surgeons, bariatric surgeons, plastic surgeons, and orthopedic surgeons.

Can tail coverage be purchased separately?

Yes. Tail insurance can be purchased as a standalone tail policy or from the present carrier as an endorsement (or add-on) to an existing claims-made policy. To qualify for Standalone Tail Coverage, you must have your application reviewed and approved by a malpractice insurance carrier underwriter. MEDPLI will help you get your application reviewed by the top A-rated carrier underwriters.

Can I purchase tail coverage on my own?

You can buy directly from the employer’s carrier on your own. However, to get multiple quotes, you’ll need to work with a malpractice insurance broker who has experience with standalone tail coverage. It’s important to note that most insurance carriers do not work directly with doctors. Tail insurance is a subspecialty for medical malpractice providers and requires a specialized broker.