Employers will often attempt to burden the physician with purchasing
tail coverage, especially if the physician terminates the contract early.
When the insurer of the physician provides
tail coverage it is done by endorsement to the policy by adding and Extended Reporting Endorsement to the policy thereby accomplishing an extension of time to report claims that have already occurred, but not yet reported.
* if you change insurers or do not renew a claims-made (2) insurance policy, purchasing
tail coverage (3) is recommended.
You will need "tail" coverage against belated claims after you retire, but many companies provide free
tail coverage after you've been insured for a minimum period (usually 5 years).
"In a mergers and acquisitions scenario, the excess and surplus lines market comes into play through the buyout of historical liabilities and the provision of
tail coverage. There's a need for tailor-made insurance to facilitate the sale or the transition into new ownership," and the excess and surplus market has the freedom of rate and form to provide that coverage when it's needed.
In other words,
tail coverage extends the life of the claim policy and makes it current.
When an organization goes out of business, it should always buy the
tail coverage so when the coverage stops, the policy covers the officers and directors for a period of time.
The physicians had been on a "claims-made" policy, so liability protection after the expiration of their current policy would require "
tail coverage." Absent the two physicians entering retirement where the
tail coverage premium would be waived, the
tail coverage expense to remain in practice was quite large.