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Physician Contract Glossary · Malpractice & Insurance

Tail Premium

The tail premium is the one-time cost of buying tail coverage when a claims-made policy ends.

The tail premium is the actual dollar cost of tail insurance, paid as a single lump sum when your claims-made coverage terminates. It usually runs one and a half to two times your annual malpractice premium, which can mean tens of thousands of dollars due all at once at exactly the moment you are changing jobs. Who bears this cost is set by the contract.

WHAT TO WATCH FOR

Calculate the likely tail premium for your specialty and state now, so the number is not a shock later. Then negotiate who pays it, because an unplanned five-figure tail bill at departure is one of the most common contract regrets.

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