True or False: Policy limits are refreshed when tail coverage is purchased.

When tail coverage is purchased, it is designed to provide an extension of coverage for claims that arise from incidents that occurred during the policy period but were reported after the policy has expired. However, the original policy limits do not get refreshed or reinstated. Instead, the tail coverage operates within the original policy limits that were in place at the time of the primary coverage. This means that if there were claims made, they would still be subject to the limits that were previously established, and tail coverage is simply extending the time frame in which claims can be made. This understanding is crucial in evaluating the implications of tail coverage, particularly for professionals in fields like healthcare, where claim reporting can often extend beyond the actual coverage period.