What does 'Tail Coverage' provide for an insured individual?

Tail coverage is a type of insurance protection that is particularly relevant in the context of claims-made insurance policies. It provides coverage for claims that may arise after a claims-made policy has expired or been terminated. This is crucial for insured individuals, as claims-made policies only cover claims that are reported during the policy period. Once that period ends, any claims that arise from events that occurred during the coverage time but are reported later would typically not be covered.

By securing tail coverage, an individual ensures that they have protection against potential future claims that could arise from incidents occurring while they were insured under the claims-made policy. This becomes especially significant in fields such as professional liability, where the time between the service provided and a claim being made can sometimes stretch for years.

The other options do not accurately describe tail coverage. For example, while tail coverage does relate to future claims, it specifically does so after a claims-made policy has ended, which is why it adds a layer of security for the insured. Immediate coverage upon policy inception refers to the standard coverage at the start of a new policy, and coverage for third-party claims is a broader term that does not specifically relate to the nuances of tail coverage.