Tail Coverage & Prior Acts
Tail and Prior Acts coverage is generally referred to as both ends of the same dog. Tail coverage provides protection from claims which may have occurred before the incept date of any current coverage, whereas Prior Acts coverage provides an extension on the current coverage to provide protection against claims which occurred prior to the termination of the current coverage.
Tail coverage is intended to provide coverage for past exposures, or is looking back. For example, when an attorney leaves a firm to start anew or join another, he or she is concerned about claims which may follow to the new venture. So, to obtain protection against such claims, tail coverage must be purchased. This provides liability coverage for claims on matters which were concluded, or left behind, and which occurred prior to the incept date of the new policy.
Prior Acts, on the other hand, is intended to provide coverage going forward. For example, when a practice is winding down, perhaps towards retirement, the attorney wants protections from acts which occur prior to the end of the practice, but for which the applicable statute of limitations has not expired, and may not expire until after the practice is closed.
These are generally additional coverages which are included as endorsements on policies, and for which additional premiums are paid. Both are important, and neither should be overlooked.
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