As health care consolidation continues at a feverish pace many physicians who have never needed to pay attention to the details of their insurance coverage are being bombarded with discussion of “nose” and “tail” coverage. The purpose of this post is to discuss the difference between medical malpractice tail coverage and nose coverage.
Most malpractice policies are written on a claims made basis, meaning that the policy in place when a claim is filed is the policy that covers the costs of the potential malpractice claim. Because of this at any point in time a doctor or surgeon has exposure to future claims from incidents that have already taken place. Often times a change in employers or a move requires a switch in insurance coverage.
Nose coverage is almost always the cheaper of the two options if available. Nose coverage involves getting your new insurance or employer to “pick up” your prior acts. Getting a new insurer in the same state to pick up prior acts is fairly easy, changing insurers across state lines can pose a challenge.
In addition many large health systems have multi-million dollar self insured deductibles – because of this they are skeptical about exposing the system’s assets to the potential claims of events from the outside. This is especially true if the physician is bringing exposure from another area of the country where the system doesn’t have experience settling claims.
Tail coverage is the more expensive of the two options. Rolling forward your liability, through nose coverage, should always be explored first. Tail insurance is the more expensive of the two options as your close out your old policy while renewing a new policy, rather than roll everything forward together. If tail insurance is your only option explore all possible options, including limiting the reporting period, to reduce the cost.
Contact InsureTail.com today to discuss your options and discuss managing your liability.