What does tail coverage typically offer to policyholders?

Tail coverage typically offers an extended reporting period for claims. This type of coverage is particularly important in professional liability insurance, such as for medical, legal, or other professional services. It allows policyholders to report claims that occur after a policy has expired or been terminated, but which relate to incidents that took place during the policy period.

This means that even if the individual or organization no longer has active coverage, they can still file claims for events that occurred while they were covered, which provides significant peace of mind. Without tail coverage, any claims related to past services performed would not be covered, potentially exposing policyholders to substantial financial risk.

It’s essential to note that tail coverage does not typically involve unlimited coverage terms, lower premiums, or wider coverage definitions, as those aspects relate to different characteristics of insurance policies. Instead, the emphasis of tail coverage is purely about the extended time frame in which claims can be reported following the expiration of the policy.