Tail insurance unveiled: Dispelling common myths for physicians

Jennifer Wiggins

Tail insurance, also known as extended reporting endorsement, is one of the most misunderstood aspects of malpractice coverage, and it often catches physicians off guard. But understanding how it works, when it’s needed, and what options exist can help you avoid costly mistakes and make confident decisions about your long-term protection.
In this article, we’ll break down what tail insurance is, why it matters, and separate fact from fiction on the most common misconceptions we hear from doctors in private practice.

What is tail insurance, and why do I need it?

Tail insurance is designed to protect physicians after they cancel a claims-made malpractice policy.

Unlike occurrence policies, which automatically cover incidents that happen during the policy year, regardless of when a claim is filed, claims-made coverage only applies if the claim is filed while the policy is active. Once you cancel a claims-made policy, you no longer have any coverage unless you purchase tail insurance to extend that protection into the future.

Think of tail as a one-time add-on that “extends the life” of your original policy. It covers you for any future-filed claims for services you provided while the original policy was active — even years after you’ve stopped practicing.

Tail insurance fast facts:

• Tail is only needed with a claims-made policy. It is not required with an occurrence policy.
• It’s a one-time purchase, typically due within 30–60 days after you cancel your policy.
• It doesn’t expire (most tails are unlimited), and once purchased, it cannot be canceled.
• Tail typically costs 1.5x to 2x your final annual premium (called your “mature” rate). If you cancel before your policy reaches maturity, your tail cost may be lower, based on your current step rate.
• It’s tied to your retroactive date, meaning it covers you from the start of your claims-made policy through the cancellation date.

Myth #1: “I don’t need tail — I’ve never been sued.”

This is one of the most dangerous misconceptions we hear. Unfortunately, prior clean history has no bearing on future liability. A patient has the right to file a claim long after care was provided, and if your coverage has ended and you haven’t secured tail, you’re on your own.

Without tail, you would be personally responsible for hiring legal counsel, paying defense fees, and covering any potential settlements or judgments. Most physicians understandably find that risk unacceptable.

Myth #2: “The statute of limitations is only two years, so I’ll just get a short-term tail.”

Not so fast.

While the statute of limitations in many states ranges from 1 to 5 years, there are key exceptions — including delayed discovery and cases involving minors. These exceptions can extend the filing window far beyond the standard period, even a decade or more.

For this reason, most malpractice experts recommend purchasing an unlimited tail, which protects you indefinitely, including coverage for your estate in the event of your death. Limited tails might save money up front but can leave you vulnerable to future exposure you didn’t anticipate.

Myth #3: “My employer will handle my tail.”

Maybe — but don’t assume.

Tail coverage is a frequent point of confusion (and conflict) during job transitions. Some employment contracts clearly state who will be responsible for purchasing tail and others are silent. In some cases, employers agree to provide tail only under certain conditions (such as staying for a minimum number of years or giving adequate notice).

If you’re leaving a job, get clarity in writing. If the employer agrees to buy tail for you, request a copy of the tail endorsement for your records. If they don’t, you’ll need to make arrangements yourself — and fast.

Myth #4: “I have to buy my tail from the same insurance company.”

Not necessarily.

Many physicians don’t realize that tail insurance is shoppable. While your current carrier is required to offer you a tail quote, you’re not obligated to accept it, especially if the cost is high or if the terms aren’t favorable.

Standalone tail policies are now available through select carriers, even if they didn’t originally insure you. These options can sometimes offer better pricing or more flexible terms, and they’re especially helpful in situations like sudden job loss, group breakups, or unexpected practice closure.

Myth #5: “I’ll just buy it later if I need it.”

Tail insurance must be purchased immediately after cancellation — typically within 30 to 60 days. Once that window closes, the quote expires, and the opportunity to buy may be lost.

While some secondary markets may offer limited coverage after the fact, those options tend to be more expensive and may not provide the same level of protection. If you’re considering a job change, retirement, or moving to a new state, plan ahead and factor tail into your transition timeline and budget.

Myth #6: “Every time I change my coverage, I have to buy tail.”

Not always.

Physicians often assume that any change to their malpractice policy (switching carriers, moving to a new group, or going out on their own) means they’ll need to purchase tail insurance. While that’s true in some scenarios (particularly when your employment agreement requires it), it’s not a universal rule.

If you’re staying on a claims-made policy and simply switching from one insurer to another, the new carrier can usually offer “nose coverage” — also known as prior acts coverage. This allows your new policy to pick up your original retroactive date and continue protecting you for all past services going forward.

The key is to ensure there’s no gap between the cancellation of your old policy and the start of your new one and that the new carrier has explicitly agreed to assume your prior acts exposure.

Myth #7: “Tail insurance will always be a huge out-of-pocket expense.”

While tail insurance can be expensive, many physicians don’t realize that you may qualify for a free tail under certain circumstances.

Most malpractice carriers offer automatic tail coverage at no cost in cases of:

• Death
• Permanent disability
• Permanent retirement from the practice of medicine (typically after a minimum number of consecutive insured years, often 3–5)

This is especially relevant for private practice physicians who intend to work until retirement. If you meet the carrier’s eligibility requirements, you could avoid that significant lump-sum tail payment at the end of your career — a relief for many providers planning their long-term exit strategy.

Bonus tip: Know your exit strategy before you start

Before accepting any position or changing malpractice carriers, make sure you understand:

• Whether tail will be needed
• Who is responsible for purchasing it
• Whether your new carrier can offer prior acts coverage (also called “nose” coverage) to avoid needing tail altogether

Having a clear exit strategy in place before you begin can save you time, money, and stress when it’s time to move on.

Final thought: Tail insurance is a one-time purchase — but a lifelong safeguard

While tail insurance may feel like a frustrating line item at the end of your policy, it plays a critical role in your long-term protection. It ensures that the years you’ve already worked, and the care you’ve already delivered, are fully shielded from future legal exposure.

Understanding your options and planning ahead will help you avoid surprises and ensure that you’re never left unprotected at the worst possible time.

Jennifer Wiggins is the CEO and Founder of Aegis Malpractice Solutions, an independent malpractice insurance brokerage that helps physicians across the country find the best coverage for their unique practice needs. She also hosts the podcast “Malpractice Insights,” offering free education and real-world guidance for healthcare providers navigating malpractice insurance.