Why is tail insurance generally cheaper than standard professional liability insurance?

• A. The policy covers fewer projects
• B. The risks are more defined and limited for the insurer because the architect has retired
• C. It provides broader coverage
• D. It has a higher premium

Answer: (B)

Tail insurance is cheaper because it covers only claims for incidents that occurred during the prior policy period, after you’ve stopped practicing, so the insurer’s exposure is bounded and predictable. When the architect has retired, there’s little to no chance of new, unreported events arising from ongoing work, meaning the remaining risk is limited to past occurrences within a defined reporting window. That reduced and defined risk makes the tail extension cheaper than maintaining ongoing coverage or buying broader, continuous protection. This isn’t about fewer projects or broader coverage, and it isn’t a higher premium.