Q&A: Who needs tail coverage?

January 23, 2009

Do I absolutely need to buy tail coverage before I retire?

Q: I'm planning to retire soon, and I am concerned about the high cost of tail coverage. Do I absolutely need to buy tail coverage before I retire? Will insurers require me to pay the full cost up-front?

A: If you have claims-made insurance, which is the most common type of malpractice insurance, you will need tail coverage-and it can be expensive. Conversely, if you have occurrence insurance, you do not need tail coverage.

Tail coverage protects you from claims that are made after your malpractice coverage ends-provided the incident took place while your policy was in effect. Of course, you're free to go without tail coverage if you choose, but it's a big risk because you'd be liable for all legal fees and damages if a judgment is entered against you. You should purchase tail coverage prior to your retirement, so you'll be covered if a former patient files a claim on your first day of retirement.

Send your practice management questions to mepractice@advanstar.com (please include your regular postal address). Answers to our readers' questions were provided by Michael D. Brown, CHBC, Health Care Economics, Indianapolis; Keith Borglum, Professional Management and Marketing, Santa Rosa, California; and Lee J. Johnson, JD, Mount Kisco, New York.