When a physician leaves and your malpractice is written on a claims-made basis, you must decide who will cover future claims arising from their past care under your program. Tail (extended reporting) coverage keeps the old policy open for new claims that allege incidents during that physician’s employment period, even after the policy or relationship ends.
Key considerations for tail coverage:
Contract obligations matter. Employment agreements should clearly state who buys tail, under what circumstances (voluntary departure, termination with or without cause, retirement), and whether cost-sharing applies.
Multiple tail options exist. You can purchase tail from the incumbent carrier, negotiate “free” retirement tails when physicians meet age and years-of-service conditions, or place stand-alone tail if the original carrier’s terms aren’t acceptable.
Alternatives to tail include “nose” (prior-acts) coverage, where a new carrier picks up past exposure on a new claims-made policy. This requires careful limit and retroactive-date review to avoid gaps.
Governance and budgeting are essential. Tail costs can be significant, so many groups treat tail as a governance and capital decision, planning for it in advance rather than handling it reactively at separation.
Liberty’s tail management expertise: Liberty helps you align contracts, carrier options, and tail/prior-acts strategies so physician transitions, mergers, and retirements don’t leave your organization or providers exposed.