The medical malpractice insurance environment is always changing. A few years ago, your options were limited if you wanted to join another practice or close a practice. While “tail policy” has been around for some time, it is now common to have alternatives for an incumbent carrier’s tail. In addition, carriers offer tail policy for other carriers. Tail policies give physicians flexibility, but it will take some careful consideration to determine if this type of policy will work for your practice.
Why Stand-Alone Medical Malpractice Tail Policies are Becoming More Popular
A stand-alone medical malpractice tail policy is typically offered whenever a physician either cancels his or her current policy or leaves a practice. It provides you with some extra time after the end of your policy to report claims. You might want this type of claim, for example, if your new carrier won’t pick up your “prior acts” coverage, you’re retiring from medicine, or you’re switching to a new kind of policy.
The passage of the Affordable Care Act greatly changed the medical insurance landscape and substantially increased demand for tail policies. Many carriers offer these policies as a way to compete against the carriers that provide current coverage to physicians. They offer the same provisions, limits and endorsements but at significantly lower premiums.
Is a Stand-Alone Medical Malpractice Tail Policy Right for You?
There is a great deal of interest in tail policies, and they are more readily available than ever before, but you should carefully consider whether this kind of coverage is right for you.
Stand-alone tail policies are basically endorsement policies that you buy from a new malpractice insurance carrier to cover any claims made against you after your traditional policy expires. It covers you in instances where, for example, you sell or shut down your practice and want to limit any exposure to prior liabilities.
This type of policy is popular because lawsuits are common in medicine, and they can happen at any time. A stand-alone medical malpractice tail insurance policy will cover any gaps you may have in your malpractice coverage. Several variables determine how much you will pay for this type of policy:
- The amount of time covered by the tail policy
- Your eligibility for any credits and/or discounts
- The amount of your current premium
Until fairly recently, you could usually only purchase a tail policy from the carrier that covered your prior practice. The premium could also be very expensive, ranging from 125 percent to more than 300 percent of your expiring premium. However, many stand-alone tails are actually less expensive than those hefty premiums — anywhere from 10-40 percent lower.
Like any other type of medical insurance, stand-alone medical malpractice tail insurance can be complex to understand. Speak with a professional agent to make sure you’re clear on your options.
Many insurance terms and components of policies can be nearly undecipherable to the layperson, which is why many physicians turn to the expert advisors with Gallagher Healthcare. We have been helping physicians find the right medical malpractice insurance coverage since the 1980s, so we know the details of the business and can put that knowledge to work for you. We will explain any confusing policy language in easy-to-understand terms and explain your options, so you can make the most well-informed decision possible.
If you would like to learn more about how we can help with a stand-alone medical malpractice tail policy or any other type of coverage, contact Gallagher Healthcare for more information and a free estimate.