You delivered your last baby and canceled your expensive malpractice policy to save money. Three years later, you are served with a lawsuit for a birth-injury case involving a child who is now showing signs of cerebral palsy. You call your old insurer, and they say: “You cancelled. You have no coverage.” You are personally liable for millions.
Key Takeaways
- Claims-Made vs. Occurrence: If you had a Claims-Made policy (common for midwives), coverage disappears the second you stop paying premiums. You must buy Tail Coverage.
- The Statute of Limitations: For birth injuries, the statute of limitations is often 18 to 21 years. Parents can sue you until the child is an adult.
- Tail Cost: Tail coverage (Extended Reporting Endorsement) is expensive—usually 200% to 300% of your last annual premium.
- Free Tail: Some carriers offer free tail coverage if you retire after age 55 and have been with them for 5+ years. Check your loyalty benefits.
The “Why” (The Trap): The Claims-Made Gap
This is the single biggest financial trap in midwifery.
- Occurrence Policy: Covers you forever for births that happened during the policy year. (Safe).
- Claims-Made Policy: Covers you only if the policy is active today.
If you retire and cancel a Claims-Made policy, it’s as if you never had insurance. The “Tail” extends the reporting window indefinitely. Without it, your past career is a ticking time bomb.
The Investigation: Buying the Tail
I called NCMIC and other carriers to ask about retirement options.
1. NCMIC (Claims-Made)
- My Analysis: They offer an “Extended Reporting Endorsement.”
- Cost: If your premium was $5,000, the Tail might cost $10,000 (one-time fee).
- The Perk: If you meet the “DD&R” (Death, Disability, and Retirement) criteria—usually age 55+ and 5 years insured—the tail is free.
2. CM&F (Occurrence)
- My Analysis: No tail needed! This is the beauty of Occurrence forms. Once you retire, you just stop paying. The past years remain covered.
3. Switching Carriers
- My Analysis: If you switch carriers, you need “Nose” coverage (Prior Acts) from the new guy, or “Tail” from the old guy. Don’t leave a gap.
Comparison Table: Retirement Strategy
| Policy Type | Action Needed at Retirement | Cost Estimate |
| Occurrence | None (Walk away) | $0 |
| Claims-Made (<5 yrs) | Buy Tail | 2x-3x Annual Premium |
| Claims-Made (>5 yrs, Age 55+) | Request Free Tail | $0 (Usually) |
[IMAGE: Timeline graphic showing ‘When the Birth Happened’ vs ‘When the Suit is Filed’ vs ‘Policy Active Period’]
Step-by-Step Action Plan
- Identify Policy Type: Look at your Dec Page. Does it say “Form: Claims-Made”?
- Request a Tail Quote: Do this before you cancel. You usually have only 30-60 days after cancellation to buy the tail. After that, the window closes forever.
- Check Retirement Rules: Are you close to the “Free Tail” age? It might be worth paying premiums for one more year to qualify for the free tail.
- Save Your Records: Even with tail coverage, keep your charts and insurance policies forever. Store them in the cloud.
FAQ Section
Can I buy tail coverage 1 year later?
No. It must be purchased immediately upon cancellation.
What if I die?
Your estate can be sued. Your policy usually includes a “Death” provision that provides a free tail to protect your heirs/estate.
Does tail coverage have a new limit?
Usually, it shares the limit of the final year, or offers a specific aggregate. Check the fine print.