What is a tail policy?
Short answer
A tail policy is the endorsement, sometimes sold as a standalone extended reporting period, that keeps a claims-made policy open to claims reported after the policy ends. Tail coverage extends the time to report a claim, not the policy period, and it may be included free for retirement, death, or disability, or purchased as a multiple of expiring premium.
When you need tail coverage
- Closing a firm or practice, or retiring from it
- Switching to a carrier that will not grant prior acts coverage
- Ending a policy because the business was sold or merged
- Cancelling mid-term, where carriers rarely include free tail
Free vs. purchased tail
Many professional liability forms include a free unlimited tail for death, disability, or retirement after a set number of years with the carrier. Other departures require a purchased extended reporting period, often priced as a percentage of the expiring annual premium depending on how long the tail runs.
Tail policy vs. tail coverage
The terms describe the same protection. Tail coverage is the coverage concept, and a tail policy is the endorsement or standalone extended reporting period that delivers it. Some carriers issue it as an endorsement to the expiring policy, while others write a separate extended reporting policy, and a few programs include an unlimited tail automatically when an attorney retires after several years with the carrier.
What tail does not do
A tail policy does not extend the policy period, add coverage that was not in the original policy, or increase limits. It also does not cover work performed after the policy ended. Read the endorsement to confirm which claims can be reported and for how long.
Common questions
- Is a tail policy the same as tail coverage?
- Yes. Tail policy, tail coverage, and extended reporting period all refer to the same protection: extra time after a claims-made policy ends to report claims for work performed while it was in force.
- Who needs to buy a tail policy?
- Firms and professionals whose claims-made policy is ending without prior acts coverage on a replacement policy, most often when closing a practice, retiring, selling a firm, or switching to a carrier that will not reach back.
- Is tail coverage always necessary when I change carriers?
- No. If the new policy carries prior acts coverage reaching back to your old retroactive date, you do not need tail for that transition. Tail matters when no carrier will reach back.
- How is tail coverage priced?
- Most carriers price it as a percentage of the expiring premium, sometimes scaling with the length of the extended reporting period. Free tail for retirement or death is common after several years with the same carrier.
- Can I buy tail coverage years after a policy ends?
- Usually not. The extended reporting period is normally elected within a short window after the policy ends, so decide before the policy expires.
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Professional Resource Insurance Agency, LLC. CA License #0G81238. Definitions are general information, not coverage advice for a specific policy.