Operating a business can be complex. Business owners have to navigate multiple risks and potential threats. While your business insurance is an asset, sometimes complications may arise, where tail insurance comes into play.
You can add tail coverage to your business owners’ insurance policy in Encino. This coverage gives you extra time to file a claim. Adding tail coverage to your business insurance policy can prevent a lapse in coverage, especially if you lean on a claims-made policy.
What Is Tail Coverage?
Tail coverage allows you to extend your time to file a claim once your business insurance policy lapses. Most business insurance policies are structured on a claims-made basis or an occurrence. Claims made policies have multiple conditions to finalize a settlement: the incident must occur between the dates when the policy starts and ends, and the following claim must be filed during that period. An occurrence-based policy allows you to file a claim even though your insurance has expired. However, the loss must occur while your policy was still active. Tail insurance provides extra coverage to cover you against new claims during that period. Tail insurance is available in annual, multi-year, and lifetime policies.
Cost of Tail Coverage
Tail insurance costs depend on the industry your business operates. Insurance companies may charge more than double the cost of your insurance premium to add tail coverage. If you are involved in a high-risk industry, purchasing tail insurance is expensive. Some tail insurance policies are available in single increments, making the costs more affordable.
Purchasing Tail Coverage
You can purchase tail coverage through your insurance agent. They can recommend coverage if your policy is about to expire. They may also include coverage with a liability insurance plan. Your insurer will assess the risk factors in your industry before adding tail coverage to your policy. Remember that you cannot purchase tail coverage as a standalone policy.
Is Tail Coverage Recommended?
If you plan to add tail coverage to your business owners’ insurance in Encino, assess the risks involved with your industry and your business operations. Tail coverage is beneficial if you have claims-made insurance policies. Tail coverage is compatible with professional liability insurance, employment practices liability coverage, and errors and omissions insurance.
Tail coverage is also an asset if you are changing insurers. Your policies should offer sufficient coverage if you stick with them every year. However, if you plan to switch carriers, tail insurance helps protect you during possible gaps in coverage. Tail insurance can assist you if you're planning to close your business. If you work in the legal or medical field, your clients may file a claim when you least expect it. Tail insurance can protect you if you're sued after expired liability coverage.
Things to Consider
Nose coverage is an alternative to tail coverage during periods of transition. Nose coverage protects your business against any issues before your policy starts. If you're retiring, opt for tail coverage. If you're shopping around for business owners’ insurance in Encino, purchasing nose coverage for your new policy is also viable.
Consult with United Direct Insurance
Tail insurance is an overlooked form of supplemental coverage. However, it can act as a safety net during times of transition. If you have any questions about your existing insurance policy or want to learn more about tail coverage, contact the experts here at United Direct Insurance. We will resolve all your issues and assist in creating the most suitable coverage plan for all your needs.