Cover Your Bases

Have you been considering a big move: buying, selling, or closing an agency, or reducing the services you offer? If so, consider the value of tail insurance coverage to protect yourself against the possibility of past mistakes affecting the future.

What Is an Insurance Tail?

Tail coverage provides continued protection against claims and incidents that may have occurred under your Errors & Omissions policy, only to be reported much later. In some cases, such as allegations of negligence, you may be personally liable; without coverage, the expense could be significant.

What Coverage Makes Sense?

There are no accepted standards for how much coverage an agency needs, or what the duration should be. These are considerations unique to each individual case. However, there are some guidelines that can help you to determine appropriate coverage:

-bilateral policies allow you to maintain coverage no matter whether you or your carrier cancelled a policy, except in cases of default
-agency buyers should make sure that sellers have at least a 3-year tail before accepting sale terms
-it’s wise to purchase as much coverage as you can afford

An insurance agent can work with you to determine the amount of coverage that makes sense, and the length of time that would be appropriate. Tail insurance coverage offers peace of mind, and protects what you’ve worked hard to achieve.