If you’ve been reading any other FAQs on our site, you won’t be surprised to learn: it depends. Canceling an occurrence policy won’t require the purchase of medical malpractice tail coverage, though it’s unlikely you have that type of policy. On the other hand, seeing the phrase “claims-made” anywhere in your policy is a good indicator that you’ll need to purchase tail malpractice insurance upon cancellation.

Coverage structure also matters for medical malpractice tail coverage. Sharing limits with an entity or other providers? Terminating your specific coverage doesn’t mean cancelling that set of limits, and there’s no need to purchase tail malpractice insurance until the set of limits being shared is cancelled entirely.

Moving to a new carrier and taking your retroactive date with you also means that purchasing tail coverage is not necessary, but you’ll want to be aware of any potential gaps. As your broker, we can help you navigate the move.

Historically, there has been a very limited market for this type of coverage, referred to as “standalone” tail coverage. This market is even further constrained for specialties that are viewed as high-risk, like surgical classes and OBGYNs.

Candidly, your carrier would prefer that you don’t purchase tail coverage malpractice; without it, they won’t be responsible for any claims that arise after you cancel your policy.

As such, it’s even harder to persuade a different carrier who hasn’t received your annual premium payments to accept that risk. Even if another company is willing to offer terms, the policy features likely aren’t as favorable as those in your expiring coverage.

Most standard policies allow free medical malpractice tail coverage to be issued upon the named insured’s death, disability, or retirement (shortened to DD&R). Each carrier has different requirements for timely reporting, supporting documents, how long the policy has been in place in general and with the carrier specifically, and even age minimums for the insured. It can get confusing quickly, so reach out to us for clarification.

After qualifying for free medical malpractice tail coverage, it’s imperative you don’t jeopardize that coverage. Carriers typically have a few allowances which can keep you practicing while maintaining your free tail malpractice insurance. Examples include teaching, volunteer work, or employment with the government where coverage is provided. If you decide to do any activity that has been disallowed by the carrier, you’ll need to purchase medical malpractice tail coverage at that point. See the next question to understand what that means for your wallet.

For claims-made policies, you can expect that the premium for tail coverage will be 2-3x the expiring premium (i.e., how much you are currently paying annually for med mal coverage). Moving your retroactive date to a new carrier, if possible, is typically more cost effective than purchasing tail coverage and starting with a new retroactive date.

Tail malpractice insurance premiums are nearly always due in full and have a hard deadline of 30-60 days after the policy cancellation date, depending on the carrier, so keep in mind you’ll need to have a lump sum available when cancelling your policy. Your carrier may be able to assign any return premium from the policy period to the tail coverage payment, but, if not, you can’t count on a refund to be issued quickly enough to put it towards the tail coverage malpractice premium. Occasionally, a carrier will offer a payment plan for medical malpractice tail coverage, but keep in mind that missing any payments will result in cancellation of coverage.

It’s always possible to negotiate who pays for tail malpractice insurance and it’s a great idea to make sure payment for tail coverage is clear in any contract you sign. If you don’t have it in writing, you can still ask your soon-to-be-former employer to pick up the cost since it’s likely they’d also benefit from the coverage in the event of a claim. Alternatively, you could ask your new employer to factor in the cost of tail coverage to your offer or to provide prior acts coverage. Keep in mind that it isn’t in your new employer’s best interest to be liable for any work you’ve done on behalf of another, so they may be unwilling to maintain your current retroactive date.