Tail Coverage
Key Takeaway
An informal name for an extended reporting period endorsement purchased when a claims-made policy is canceled or not renewed. Tail coverage allows the insured to report claims after the policy has ended for acts that occurred during the policy period.
Definition
An informal name for an extended reporting period endorsement purchased when a claims-made policy is canceled or not renewed. Tail coverage allows the insured to report claims after the policy has ended for acts that occurred during the policy period. The cost typically ranges from 75 to 300 percent of the final annual premium depending on the reporting period length.
Why This Matters for Law Firms
Understanding this concept is essential for law firms because it directly affects how your coverage responds when a claim is filed. Misunderstanding policy structure terms can leave your firm exposed to uninsured losses, particularly during carrier transitions or when claims surface years after the underlying work was performed.
Example Usage in Context
A managing partner reviewing the firm's renewal materials might ask the broker: "Can you confirm our tail coverage aligns with what we had under the prior carrier? We want to make sure there are no gaps in our retrospective protection."
Related Q&A
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