What Tail and Nose Coverage Mean for Malpractice Insurance

Updated on April 11, 2024
What Tail and Nose Coverage Mean for Malpractice Insurance

When choosing medical malpractice insurance, you may see terms such as “tail and nose coverage” without really knowing what they mean. Below, we explain the intricacies of tail and nose malpractice insurance and what medical professionals should know about it.

What Is Tail Coverage?

Medical malpractice insurance usually functions on a claims-made basis. This means the policy covers claims made during the policy period, regardless of when the incident occurred. Tail coverage allows you to report claims after your policy has ended for incidents that occurred during the policy period but were not reported until later.

There are many types of tail coverage for insurance policies outside medical malpractice, including for regular businesses and entrepreneurs. Tail coverage is of particular importance in situations where a health-care provider changes employers or retires.

Do I Need Tail Coverage?

Tail insurance is a vital component of managing risk and protecting a health-care professional’s longevity. Although not always legally required, it often proves to be a prudent purchase. Financial experts and industry leaders frequently recommend tail coverage to protect professionals from potential high-cost claims long after they’ve ceased practicing.

What Is Nose Coverage?

While tail coverage addresses past incidents, nose coverage pertains to future risks—specifically, claims related to known and potential risks that occurred before the policy inception. Nose coverage allows the insured party to receive coverage for incidents that they anticipate may become legal issues in the future and for claims that arise from occurrences at the time of applying for the insurance.

In certain circumstances, particularly when a medical professional is aware of an error in the care provided, nose coverage can be an important asset that mitigates future claims uncertainty. Most standard malpractice insurance policies do not include nose coverage and are typically bought at later dates.

Do I Need Nose Coverage?

Health-care providers who are changing jobs or affiliations should consider nose coverage during the transition to ensure no gap in malpractice insurance coverage. Essentially, nose coverage protects against liabilities that providers may carry with them from the past into their new practices.

How Is Nose Coverage Different From Tail Coverage?

The major distinction between nose and tail coverage is the time frame each covers. Tail coverage addresses incidents that occurred before the end of a policy, allowing policy-owners to make claims after the expiration of the policy. In contrast, nose coverage addresses potential claims made before a new policy starts, allowing the insured to make claims during the new policy period.

Which Coverage Is Best for Me?

Now that we know what tail and nose coverage for malpractice insurance means, which is best for medical professionals? Ideally, you wouldn’t need either to fill gaps in coverage, but if you’re switching carriers or retiring, nose and tail coverage is invaluable to ensure malpractice protection. When you’re navigating the intricacies of malpractice insurance, engaging with a knowledgeable insurance broker or attorney who specializes in health-care law can be invaluable.

We hope our guide has helped you better understand the intricacies of claims-made malpractice insurance and the different types of coverage. Intimately understanding these details is integral to choosing the ideal malpractice insurance policy for yourself or your health-care practice.