Tail coverage is an insurance add-on known as extended reporting coverage. When it comes to professional liability tail coverage, this allows you to continue to cover claims after a policy expires. While this does not extend the coverage period, it does give you more time to report an incident.
What Is Tail Coverage?
Say that you are dealing with a liability claim after your coverage expires. If your coverage lapses, then you’re going to be responsible any legal fees and damages. With tail coverage, if the services occurred before the professional liability insurance lapsed, then you’re still covered.
Why Do You Need Tail Coverage?
You may be wondering you need the extra time that tail coverage offers. It’s important to understand that while an omission or negligent act may happen, the damages may not show up until later. Here are a few situations where tail coverage is important:
- A professional retires
- A professional changes firms
- A professional opens a solo practice
- Two businesses merge
Any of these situations can lead to a need for extended coverage. It is best to stay protected.
In order to keep your business safe, liability insurance is crucial. When it comes to add-ons, professional liability tail coverage can benefit your company. Tail coverage extends the reporting period for your policy.