Tail coverage provides protection for claims arising from activities during the policy period after termination. Which of the following best describes its purpose?

• A. It extends liability for acts that occurred before the policy period.
• B. It covers claims arising from activities during the policy period after termination.
• C. It reimburses policy premiums after termination.
• D. It applies only to non-professional conduct.

Answer: (B)

Tail coverage, also known as an extended reporting period, is designed to close the gap after you leave a practice by covering claims that arise from activities during the policy period but are reported after termination. In a claims-made policy, coverage is triggered by when a claim is made, not when the incident occurred. Without tail coverage, a claim for something that happened during the policy term but is filed after termination might fall outside the policy’s protection. This option matches that purpose exactly: it covers claims arising from activities during the policy period after termination.

The other ideas describe different concepts: extending liability for acts before the policy period relates to retroactive or prior acts coverage, reimbursing premiums isn’t what tail coverage does, and tail coverage isn’t limited to non-professional conduct.