The never-ending issues of “tail coverage”
Gallagher Healthcare :: Industry InsightsBy Brandon Rich | 1/29/2015
If you’re a physician purchasing tail coverage or a physician who is changing the carrier you’re insured with, you should be reading this. Fully understanding how your tail coverage works and the intricacies behind it, from a coverage standpoint, should be fully understood by you or by the person helping you (your broker).
I’ll give two examples about what I’m referring to and why it’s important.
A physician purchases tail insurance or obtains a free tail – Is everything covered? What typically changes?
One might expect that when a physician obtains tail coverage that the policy would stay perfectly intact for its duration (specified in the policy language). That is true in some regards; yes, if you have a new malpractice claim brought against you, for the specified time period for which the tail provides coverage, then typically you’re covered. The question then becomes, do you have the same policy and coverage that you had when this policy was active before you purchased the tail?
The answer is almost always no.
Some of the things you could lose whenever you move to your tail policy are as follows:
- Removal of your medical board coverage
- Removal of the consent to settle clause (which now lies solely with the carrier)
- Defense costs move to inside the limits of liability
- Removal of cyber liability and regulatory liability coverage
- Limits of liability are not reinstated
A physician changes carriers
The big issue with changing carriers is the potential to be sued for known negative outcomes that have happened in the past, which could lead to your new carrier denying you coverage. Furthermore, if you have an ongoing claim with your current carrier and a medical board complaint is brought against you for that incident, you could be stuck without coverage.
These are all reasons why we recommend you work with a professional who thoroughly understands the nuances within the medical malpractice insurance world. When you purchase coverage directly through an insurance carrier or you work with a broker who is not a specialist, you are putting yourself at potential risk. Call a Gallagher representative today for a comprehensive analysis and a free review. We would love to show you how we can help you.