Tail coverage is extra insurance you buy when an old claims-made policy ends, to cover claims that arrive *after* the policy expires for work done *during* the policy. Think of it as an extended safety net. Without it, you could face a legal claim in 2026 for something that happened in 2024, but have no insurance because your 2024 policy ended. Tail coverage typically costs 150–300% of your annual premium and lasts 1–3 years, depending on what you negotiate. This is critical in professional fields like law, medicine, and consulting where clients can sue years after the work is done.
If your contract requires claims-made insurance, *always* negotiate for the other party to pay for tail coverage when the relationship ends—or at minimum, require them to reimburse you for it. Get the tail coverage cost in writing before you sign, so there are no surprises later. ---
Frequently Asked Questions
What does this clause mean in simple terms?
Tail coverage is extra insurance you buy when an old claims-made policy ends, to cover claims that arrive *after* the policy expires for work done *during* the policy.
Why should I care about this clause?
Think of it as an extended safety net.
What are my options?
Without it, you could face a legal claim in 2026 for something that happened in 2024, but have no insurance because your 2024 policy ended.
How does this affect small businesses?
Tail coverage typically costs 150–300% of your annual premium and lasts 1–3 years, depending on what you negotiate.