What is "tail" coverage?

The term "tail coverage" was originated by the insurance industry that introduced the CLAIMS MADE professional liability insurance policies. Because claims made policies do not provide coverage for claims or suits made after the insurance policy is discontinued, this additional coverage was developed by insurers.

For doctors the claims made policies were fine as long they could renew their claims made policies with the same insurer. If the doctor wanted to change insurance companies, retire from practice or if their claims made policy was canceled by the insurer, the tail coverage policy would need to be obtained from the insurer that had been providing the claims made policy. The two big problems with the tail coverage policy was that there was no assurance as to how much the insurer would charge for the tail coverage policy and there was no guarantee that the insurer would have to provide the tail coverage policy.

The tail coverage acquisition problems have been further complicated by the recent insolvency of the PIE Mutual Insurance Company. The courts, in addition to terminating that company's outstanding policies also termination that insurer's tail coverage policies that had previously been issued. This left some retired doctors without any professional liability insurance coverage. This makes the insurer tail coverage policy availability and continuity even less certain.

In addition to these insurer tail coverage pitfalls, there are some other problems with the tail coverage policies issued by insurers. Among these other problems are the insurer's usual requirement for the insured to pay the entire tail coverage premium within a thirty day period and that the tail coverage limits of coverage are for all future claims or suits (that is, the tail coverage limits are not annually reinstated).

WHAT HAPPENS TO TAIL COVERAGE IN KANSAS?

Kansas health care providers have a unique situation. The Fund law requires all insurers to include prior acts coverage in their health care provider professional liability policies and incorporates tail coverage for eligible inactive health care providers in the coverage of the Fund. The tail coverage limits afforded by the Fund are also reinstated on an annual basis.

The Fund tail coverage requirements, provisions and related matters are explained in the "frequently asked question" section of this web site.

Because this is a very important area of the Fund coverage features, health care providers are encouraged to contact the Fund for any additional assistance in understanding these provisions of the Fund.