0:00

So how do we address this issue about the claims made

0:05

policies which expire and then you get sued

0:09

after the claims made Policy is no longer in effect.

0:13

Well, this is where you have these extras that I refer to

0:17

the tail, which is called the extended reported period.

0:21

It allows you to extend the coverage period

0:25

beyond even when you've retired.

0:27

So for claims made

0:28

after the termination of coverage by an insurer.

0:31

So remember you had a 2024 event that was, uh, sued.

0:35

You get sued in 2026.

0:37

If your policy is only to 2026

0:42

and the suit arrives at 2028,

0:44

you're not covered in claims made unless you have a tail.

0:48

If you have a tail, you could extend that

0:50

for an extra five years

0:52

and the coverage for the tail gets more

0:55

and more expensive depending upon how long you want

0:58

that tale to last.

1:00

So for example, in the first year

1:02

after the claims made policy has expired,

1:06

they're gonna charge you 74.8.

1:08

But if you extend it for two years

1:10

after the end of the policy, 122% of the

1:15

original premium, if you go as high as five years,

1:20

your premium for that tail will often be two

1:24

and a half times the,

1:28

uh, original policy premium.

1:29

So it's expensive, but it covers you.

1:33

It's important for people who are retiring

1:35

or if you change jobs

1:37

and you leave behind the policy,

1:39

your new job may not cover you for

1:42

what you did in your previous job.

1:44

So you have to buy the tail.

1:46

So this is provided by the carrier

1:48

that you've left the insurer

1:50

that you no longer are using either because of retirement or

1:53

because you switch insurers.

1:56

The other thing is, uh, another term

1:58

that's used is the nose.

2:01

So the nose is for claims made on activity prior

2:05

to the initiation of coverage by a new

2:08

or subsequent insurer.

2:09

So this is the new insurer will pick up

2:13

your mistakes from the previous years

2:17

of employment in which you had a different

2:20

malpractice insurance

2:22

where we're in a different practice setting.

2:25

So it's provided by the new insurance company

2:27

for the prior acts, while under a previous

2:30

coverage for claims made.

2:32

So this is what's known as the nose

2:33

and includes this retroactive date

2:35

that your policy started in 2026 with the new insurer,

2:40

but they're covering back to 2021 with the retroactive date.

2:46

The alternative of having a tail is

2:48

what I explained previously, which was a claims paid policy,

2:52

which you can specify for a period of time when paid,

2:55

when claims are paid out regardless

2:57

of when the incident occurred.