APMA News - March/April 2020 - 43

Coverage Corner
Submitted by PICA

When is Tail Coverage Necessary?
As a practicing podiatrist, your day is filled with treating patients, completing paperwork, and managing day-to-day tasks
of your practice. With so much to do, you may not give much
thought to your professional liability coverage. PICA has prepared this article to give you important details on your policy, so
you can be fully prepared if an incident should arise, today or
years from now.
PICA is often asked about tail coverage and when it is necessary to acquire. Claims-made policies provide malpractice
coverage for incidents that occur during the policy period and
are reported while the policy is still in force. Once the policy
has been terminated, there is no coverage for a claim unless tail

Tail coverage is an important
component of your professional
liability coverage. It is imperative
to discuss your options when
you experience any changes
in your practice status.
coverage is acquired. Tail coverage provides coverage for claims
that occurred while a claims-made policy is in force, but that
were first reported on or after the policy termination date.
Even if you do not plan to cancel your existing policy, you
may still need to consider tail coverage if you run into one of
the following situations.

n Relocating to Another State
When relocating, you need to be aware that not all insurance companies provide coverage in every state. Fortunately,
PICA offers coverage in 49 states, but it is still necessary to
call your PICA account manager to be sure you will be covered in your new state. If not, you may need to discuss tail
coverage options if prior acts cannot be covered otherwise.

n Merging Your Practice with Another Practice
If you plan to merge your private practice with another one,
the insurance company that insures the newly merged practice
may offer prior-acts coverage. Therefore, you may not have to
purchase tail coverage, but be sure to discuss this concern.

n Leaving a Group Practice
Group practices may require podiatrists to purchase tail coverage when they leave the group. If you are joining a new group,
you may be able to negotiate the purchase of tail coverage in
your employment contract. However, if the policy covering your
new practice includes prior-acts coverage, purchasing tail coverage is unnecessary. This question needs to be addressed prior to

employment, so you and your employer have a clear understanding and come to an agreement regarding tail coverage.

n Gaining Employment with a
VA or Private-Sector Hospital
The government provides its own insurance, so you will
likely need to purchase a tail policy if you decide to work for a
VA hospital. If you gain employment with a private-sector hospital, it may require you to purchase tail coverage to insure you
for claims that may be reported from your prior work. Again,
you may be able to negotiate the purchase of tail coverage in
your employment contract with the hospital. Your new employer may allow you to continue your coverage with PICA,
making the purchase of tail coverage unnecessary.

n Halting Practice
Practicing podiatrists often decide to halt their practice to
stay at home with children or for other personal reasons. If you
decide to halt your practice, you will need to purchase tail
coverage. However, if you are just taking a short leave, you
may qualify for a leave of absence, subject to underwriting approval, and a discounted premium.

n Retiring
When you retire, you need to have coverage for claims
that may have occurred while you were practicing, but that
may not be reported until after retirement. Fortunately, PICA
provides tail coverage at no additional charge to policyholders upon permanent and total retirement after five consecutive years of PICA coverage. PICA also offers tail coverage to
policyholders at no additional cost when termination of coverage results from death or permanent and total disability.
Tail coverage is an important component of your professional liability coverage. It is imperative to discuss your options
when you experience any changes in your practice status. As
you can see, there are many scenarios in which tail coverage is
necessary. If you have a separate limit corporation policy, tail
coverage needs to be purchased for the corporation as well.
If you have any questions regarding your coverage, do not
hesitate to call your PICA account manager at 800-251-5727.
PICA's team of knowledgeable professionals is available and
happy to help.
n
This article is not intended to constitute legal advice or create an attorney-
client relationship, but is intended for general information only. An attorney
or other resource should be consulted regarding individual cases.

For more information, contact the PICA Risk Management department at 800-251-5727, ext. 2107, or visit
www.picagroup.com.
APMA News March/April 2020

http://www.picagroup.com

APMA News - March/April 2020

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