If you plan on canceling your Errors and Omissions (E&O) insurance policy, then there’s a good chance that you may want to consider purchasing tail coverage to be safe. If you do, then any claims that are made after canceling can still be covered by the insurance program, as long as the actions that are being brought to court happened during the original coverage period for the professional insurance plan. For example, this can be helpful when a doctor is moving practices or an agency is selling its firm. There is no longer a need for coverage for those practices or firms. However, claims of malpractice or negligence may not immediately come to light, and delayed claims can be a serious financial loss. What about tail coverage cost, though?
Is Tail Coverage Worth the Cost?
Tail insurance policies can be quite pricey, depending on a variety of factors. This is why you should search for a policy that can be better customized for your needs. Tail coverage cost can often time be based on a multiple of the original policy’s premium. The price, however, can be lowered with a number of changes. Most importantly, the coverage period for the tail can be shortened if needed.
Keep in mind that legal fees from delayed claims can be quite costly, and there’s no telling when someone may bring an issue to court. For these reasons, it’s a good idea to buy as much tail coverage as you are able to financially.”