A claims-made policy covers claims reported while the policy is active. When the policy ends, a “tail” (extended reporting endorsement) must be purchased to cover claims reported later for prior work — the tail typically costs 150–200% of the final year’s premium. An occurrence policy covers any incident that happened during the coverage period, regardless of when the claim is reported later, and requires no tail.
Occurrence costs 15–25% more upfront but eliminates the tail exposure at retirement or job change. Most Southeast group practices default to claims-made for near-term budget efficiency; solo physicians nearing retirement usually switch to occurrence 5–7 years out.
