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3 Essential Things to Know About Tail Coverage

Life is full of unexpected events that may benefit from an additional insurance policy. Tail end insurance is one instance where supplemental coverage may be helpful since it extends coverage for claims filed after a policy expires. Here are three essential things to know about tail end coverage or the Extended Reporting Period (ERP) before you cancel your policy.

Why Tail Coverage is Important

Because daily life is often unpredictable, this endorsement gives policyholders peace of mind because it allows you to file a claim against your policy even after it expires or is canceled. Adding this supplemental claims-made insurance policy requires additional payment to your insurer, but is often worth the added cost. Keep in mind that while this policy does grant you more time to file a claim, it does not extend your current policy period.

How Long Coverage is Needed

Many insurers recommend purchasing the most time possible because you cannot add additional time after your endorsement ends. It’s also important to note that since an ERP is a fixed time, it’s also not renewable.

Additional Costs

Generally, most insurers look at your professional liability policy and charge an additional fixed percentage. Usually, this cost is between 100 to 300% of your final premium.

Tail end coverage can be a practical endorsement option for anyone with professional and management liability policies. Just make sure you add the endorsement before canceling your policy to ensure you don’t miss any narrow window.

Tail Coverage Is a Necessary Protection

When it comes to business insurance options, you have a lot to consider. If you work with patients or clients on a daily basis and work in a field where lawsuits are common, then you need to think about tail insurance.

Why You Need Tail Coverage Insurance

Tail coverage is an add-on policy. This policy is for claims that occur when your policy expires. For instance, if you are a doctor and you treat a patient while you have insurance, then retire or change insurance providers, but the patient files a lawsuit. That lawsuit would not be covered under any current insurance plan because the services provided were provided before you received the policy. Tail coverage would cover these suits that occur after you lose your insurance, but cover events that happened when you still had it.

Why You Need Custom Tailored Options

Custom-tailored insurance solutions are crucial, according to the experts at www.axisins.com. This is because every business has its share of differences. The amount of professional liability coverage that you need may differ extensively from another business. The policies that are most common under tail coverage are:

  • Errors and omissions
  • Professional liability
  • Directors and officers

All of these coverages are important to your business, but what your individual policies are depends heavily on your company and your office’s particular needs. When it comes to your company, tail insurance is crucial to keep you afloat when your insurance coverage runs out.