Tail insurance generally comes into play when a professional leaves an agency or retires. A tail policy extends the claims limit terms of a terminated E&O policy. If your insurance is occurrence-based, tail insurance may not be required. Tail coverage is for claims-made liability insurance. This insurance has a time frame in which a claim can be filed for it to be covered. In professional occupations, claims may not be immediately made. Tail insurance just gives you more protection against lawsuits that occurred when the E&O policy was in effect.
Sometimes, an agency will provide E&O coverage for an employed professional. When the person separates from the agency, the insurance coverage ends. Whether the professional pays for tail policy or the agency does often boils down to the contract. If you’re a professional relying on tail insurance as protection, you should ask about tail insurance before you retire or separate from a business. Ultimately, you are responsible for risk management of your professional career.
Consider Tail Coverage For Peace of Mind
A tail insurance policy may not be necessary if you’re staying insured by the same insurer even though you’ll be working at a different agency. Tail insurance is not required in retirement, but it should be considered before ending an E&O policy. It makes sense to talk to your insurer before making the decision to drop an E&O policy, no matter who pays for the coverage.