Tail coverage protects against medical negligence. Unlike typical insurance, tail coverage protects providers from medical malpractice lawsuits filling after their policy has been canceled.
Here’s how tail coverage works in practice:
Doctor A’s insurance policy is good from January 1, 2010, until December 31, 2020.
On September 1, 2020, Patient B accused Doctor A of wrongdoing, but Patient A did not file a medical negligence claim until May 1, 2021. The cases are still within the statute of limitations for medical negligence, but This point has revoked doctor A’s insurance coverage. The new insurance coverage excludes past acts, and doctor A will not be covered for this claim unless he has acquired tail coverage.
This issue is significant for Doctor A (who may be uninsured and so personally responsible) and for Patient B’s claim. That’s because, even if Patient B’s action is successful and the court awards them a significant medical malpractice damages award, collecting a judgment against an individual doctor would be far more complex than ordering from an insurance company.
A few key factors to remember when it comes to tail coverage: For starters, it only covers health care providers for activities performed within the initial policy period. Thus it won’t pay claims for conduct committed during the tail coverage period. Second, it may contain a liability limit that differs from the policy’s aggregate claims-made limit.
Tail Coverage in Medical Negligence Insurance Policies
A plaintiff in a medical malpractice lawsuit may file the claim years after the misconduct happened. That might be allowed under the statute of limitations, especially if the state has a discovery rule that enables the statute of limitations to be elongated. However, if the plaintiff’s policy expired before the claim was submitted, they may have difficulty getting reimbursed via the doctor’s insurance coverage.
Medical malpractice claims submitted after an insurance policy has ended are covered by tail coverage, which is meant to address this issue. It’s not the same as traditional medical malpractice insurance policies, which are called claims-made policies. These policies stipulate that the claim must be filed while the insurance is still in existence. (Most basic claims-made policies need the malpractice occurrence during the insurance term to be covered.)
How Tail Coverage Works
If a doctor commits malpractice after their policy time, the patient may not realize it until the policy has expired. Meanwhile, the doctor may have new insurance coverage, but this new policy is unlikely to cover incidents of malpractice that occurred before the procedure began. As a result, the doctor is technically uninsured for this claim, making it difficult for a plaintiff to recover all of their damages. They can seek compensation from a doctor’s assets, but these may not be sufficient to pay the costs of their injuries, especially if they are severe.
As long as the malpractice incidence occurs during the initial insurance term, tail coverage addresses the gap. It does not cover malpractice occurrences that happened while the doctor was solely protected by tail coverage. Occasionally, tail coverage insurance will have a lesser liability limit than the original policy. It usually has an unlimited period, although an insurer may give a shorter term for a lower price.
Tail coverage is available for an extra fee for doctors, but it is usually included in regular plans, and premium coverage is one of them.
While tail coverage premiums may be substantially more than standard coverage, it is usually a good idea to have it so that the doctor’s assets are not jeopardized. The doctor may stretch the cost of tail coverage over several installments or deduct it from their taxes as business expenditure. If a group of doctors works together, they may be able to divide the cost of the tail coverage premium.
Tail Coverage Alternatives
If doctors want to save money, they might consider getting limited-term tail coverage, as long as the organization they join allows them to do so. They may also be able to save money by purchasing an extended reporting endorsement. Nose covering is the most common alternative to tail coverage, hidden under the doctor’s new insurance policy. It is the polar opposite of tail coverage in that it covers claims submitted during the new policy term, even if the malpractice happened before the start of the new policy.
Not all doctors are eligible for nose coverage, particularly if they have a history of malpractice claims or if malpractice cases are frequent in their area. Suppose a doctor previously worked for a different medical group. In that case, they may not acquire nose coverage since the new insurer may not want to coordinate a defense with the former group’s insurer if they are not the same.
This article is all about the tail coverage of medical negligence.
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