Tail Coverage Considerations

Tail Coverage Considerations

Whether you’re canceling a policy to move your policy elsewhere or you’re retiring, if you have a Claims-Made policy you will have to Tail-out. Okay, but what does this mean? Let’s discuss the ins and outs of Tail Coverage and what you need to consider!

What is Tail?

Tail Coverage, also known as Extended Reporting Period (ERP), allows an insured physician the option to extend coverage after the cancellation or termination of a claims-made policy.

Carrier Options

We provide options available from a variety of carriers.  Savings can range between 8-26% depending on your specialty and claims history.

Stand Alone Tail

In weighing all your coverage options, you may see non-standard market offers with lower pricing in exchange a deductible (retention). This may also include a shortened time to report claims from indefinitely to a limited number of years.

Know the terms of your policy before moving forward!

Price & Financing

Tail Coverage is anywhere between 180-200% of the mature rate of your policy. For instance, if you are a physician with an expiring premium of $20,000 the Tail would be around $40,000.   Generally, this due within 30-60 days after the policy is cancelled.

Luckily there are financing options! We look for creative options to finance tail whether with your current carrier or elsewhere, as needed.

Plan Ahead

Before you cancel, Plan Ahead – consider changing coverage to a carrier that offers better pricing or better financing terms before you have to cancel the policy. Also, consider switching to occurrence coverage to avoid a tail payout all together.

NOTE: Sometimes converting to occurrence can save you 30% or more in the long run.

Things to Know:

  1. Options: Current Carrier & Stand Alone
  2. Cost: Roughly 200% of Expiring Mature Premium
  3. Duration: Tails can vary from 2 years up to unlimited
  4. Carrier’s Financial Rating: AM Best Rating, A or better

If you are considering Tail Coverage and need help planning, please give us a call directly at 1-800-317-6411 or email us at info@presidioinsurance.com.


Are You Considering Tail Coverage? Let’s Discuss Your Coverage Options Today!