title: How your "free" tail liability policy is funded.
abstract: The Extended Reporting Endorsements for Claims-made Professional Liability policies are provided to insured doctors in the event of death, disability, and retirement (DDR) with no additional premium charge if certain criteria are met. However, this "free tail" policy is actually pre-funded via a percentage loading applied to all insureds' ongoing premium. The amount of this loading is determined by continual monitoring of the demographics of the insured population. This article sheds light on the process used by professional liability companies to price "free tail" policies and reviews the key concepts involved.
authors: Bickerstaff & Whatley, 45-210 Club Drive, Indian Wells, CA 92210, USA. dbick@bickwhat.com
authors: D R
authors: DR
authors: Bickerstaff
mesh_terms: D006801:Humans; D007343:Insurance Carriers; D007351:Insurance, Liability / Q000191:economics*; D014481:United States