TAIL COVERAGE

WHAT IS TAIL COVERAGE & WHY DO I NEED IT?

Surplus lines insurance covers medical malpractice for higher risk procedures, typically including any compounded medications, FDA off label use, or functional medicine yet to be recognized by the WHO or AMA, or other major medical associations.

These types of medical practices are NOT covered by common mutual insurance companies, and unfortunately, surplus lines are only available as CLAIMS MADE INSURANCE COVERAGE.

There’s something important to keep in mind with your “claims-made and reported” policy. This type of coverage requires the policy to be active at the time you report an insurance claim.

When requesting to Cancel your policy, this triggers an extended reporting option, called “tail insurance.” This gives you the chance to purchase extra coverage so you can still report claims that come up after your policy is cancelled. Most states have a statute of limitations, typically 3 years, during which claims can be filed. The Tail is intended to cover your tail.

For full details, please review the “extended reporting provision” in your current medical professional liability policy. If you decide not to buy tail insurance, you’ll be responsible for any claims reported after the policy cancellation date.

WHAT DOES TAIL COVERAGE PREMIUM TYPICALLY COST?

Standard Tail Coverage Period (1–3 Years): 100%–200% of the expiring annual premium.

For example, if the annual premium is $10,000, the tail coverage might cost $10,000–$20,000 for coverage that extends 1–3 years.

Loss of Retroactive Coverage

The Policyholder understands that upon cancellation of the current claims-made policy:

• Any claims arising from incidents that occurred during the policy period but are reported after the policy cancellation date will not be covered unless tail coverage or a new policy with retroactive coverage is obtained.

Tail Coverage Purchase Option

The Policyholder understands that tail coverage must be purchased to extend coverage for claims reported after the policy's expiration or cancellation date for incidents that occurred during the active policy period:

• Tail coverage typically provides protection for claims reported within a specified period, generally up to three (3) years from the policy end date.
• Failure to purchase tail coverage may result in significant liability exposure.

Obligation to Secure Continuous Retroactive Coverage

The Policyholder understands that securing a new claims-made insurance policy without maintaining retroactive coverage will leave gaps in coverage for prior acts:

• Retroactive coverage must extend to cover all prior acts dating back to the retroactive date of the canceled policy.

Medical Directory and Provider Risks

The Policyholder acknowledges that any individuals or entities, including medical professionals listed in the policy's medical directory or other providers covered under the policy, will lose protection upon cancellation unless adequate measures (such as tail coverage or a new policy with retroactive coverage) are taken:

The Policyholder accepts full responsibility for communicating this risk to all affected parties.

Financial and Legal Implications

The Policyholder understands and agrees that cancellation of the policy without appropriate coverage in place could result in:

• Personal and professional liability exposure for uncovered claims.
• Financial losses due to claims that are not covered after the cancellation date.

By signing below, the undersigned affirms that they are duly authorized to act on behalf of the Policyholder and that they have read, understood, and voluntarily agree to the terms of this Acknowledgment and Waiver.

This document is a legally binding policy cancellation request, acknowledgment and waiver.

The Policyholder is strongly encouraged to consult with an attorney or insurance professional before executing this waiver to ensure a full understanding of its implications.