What does tail coverage in professional liability insurance do?

What does tail coverage in professional liability insurance do?

• A. Tail coverage reduces premiums while in force.
• B. Tail coverage extends protection for claims that arise after the policy ends but were filed later.
• C. Tail coverage is automatically included in all occurrence policies.
• D. Tail coverage eliminates the need for any other coverage.

Answer: (B)

Tail coverage, also known as an extended reporting period, is designed to protect you for claims that stem from incidents during the policy period but are filed after the policy ends. This matters because in many professional liability setups, a claim may be made long after the work was done or after you’ve changed insurers or retired. Tail coverage preserves the ability to defend and pay those late-filed claims even though your active policy has ended. This is especially true for claims-made policies, where coverage is triggered by the claim being made and reported within the policy period. If you end a policy or switch providers, tail coverage fills the gap so you aren’t left exposed for old incidents. It doesn’t reduce premiums while the policy is in force, and it isn’t automatically included in all policies. It also doesn’t replace other coverage you may need; it simply extends the window to report and handle claims from events that occurred while insured.

Tail coverage, also known as an extended reporting period, is designed to protect you for claims that stem from incidents during the policy period but are filed after the policy ends. This matters because in many professional liability setups, a claim may be made long after the work was done or after you’ve changed insurers or retired. Tail coverage preserves the ability to defend and pay those late-filed claims even though your active policy has ended.

This is especially true for claims-made policies, where coverage is triggered by the claim being made and reported within the policy period. If you end a policy or switch providers, tail coverage fills the gap so you aren’t left exposed for old incidents.

It doesn’t reduce premiums while the policy is in force, and it isn’t automatically included in all policies. It also doesn’t replace other coverage you may need; it simply extends the window to report and handle claims from events that occurred while insured.