Its called a nose policy. It depends on the insurance company and how long a time period they are covering. There appear to be two types. One is like a tail but it works for claims from acts prior to the new policy (hence the term nose). It usually costs the same as the first years policy. The other type of nose doesn't need a separate check but puts you in the same year of maturity as your old policy. For example if you had two years with the old policy and bought a nose policy you would pay as if you had three years maturity with the new instead of one. Either way might be cheaper/less cash out of pocket. Not all companies offer nose policies.
David Carpenter, PA-C
Yep, the other alternative (instead of buying a tail) is to buy a "nose policy"
My sister left her group in Suburban Maryland and her tail was $40K. That was for a 1/3 million policy. She royally got screwed in the whole partnership track...long story but she's not the only one the group has screwed in the past.
Anyways, she ended up purchasing a "nose" policy. It only covered 250/750K. But it saved her a lot of money. She paid $10K for the nose policy.
For all those "rookie" attendings or those who don't know how to negotiate. Pay close attention to tail coverage.
If I am on a partnership track:
Ask for tail coverage if you don't become a partner. Don't take the group's word..."oh once you become a partner, your tail will be covered" This is a red flag warning.
Fair groups will do something like this: 2 year parternship track
If you leave within 1 year, you pay the tail, If you leave between years 1-2, the group splits the tail with you 50/50. If you leave after 2 years (you are a partner at that time), the group pays the entire tail. That's the fairest negotiation tactic. If any group doesn't agree to this, I terminate contract discussions.
I hope future graduating residents read this message board. Because so many of them are clueless about tail coverage. It's a lot of money we are dealing with here. I am lucky to have older siblings in anesthesia. So I have helped my friends out with their contracts.
When you do the math (assuming most tail coverage is 2.5X the last premiums), there's really no cost savings paying occurrence vs. claims. With occurrence you end up paying it all up front while tail (obviously you pay at the end). But people who end up with tail usually don't reserve extra cash to pay for tail coverage so there's a sticker shock.
As for California, I am surprise you got a policy for $1600 for the first year. It's usually (cause my brother is out there), $5000, $7500, $9500, $11000, and than matures around $14000-15000. That's for a 1/3 million policy with claims made.
To the OP, I have worked in DC before. $30K for a tail coverage for only 1 year sounds excessive to me. Was it a 1/3 million policy or were they paying for a 3/5 million policy? Your first year claims made policy should have only been around $7K max....2.5X 7K should be around $18K for the tail after one year.
Last time I worked in DC, my hospital paid occurrence and I know for a fact that the policy was around $25K, this was in 2008 for a 1/3 million policy.
