# Tail insurance

Run-off cover a seller buys so claims filed after closing are still paid.

Most small-business liability and professional policies are claims-made, meaning they answer only while the policy is live. The day the seller cancels theirs, a customer suing over a job finished two years ago has nobody to bill except the business you now own. Who buys the tail, for how many years, and at whose cost is a [purchase-agreement](https://searchspheresource.com/glossary/purchase-agreement) term, not an afterthought. It is cheap enough that a seller refusing to buy one is telling you something.

In numbers: A three-year tail on a $1M professional policy commonly runs 150% to 250% of one annual premium, so a $4,000 premium becomes a $6,000 to $10,000 line in the closing costs.

Source: https://searchspheresource.com/glossary/tail-insurance
Not dated: A definition is editorial: what a term means, why it matters, and an example. None of it reads a source that can go stale, so there is no date to take and a stamped one would be the build time wearing a costume.

Site index for machines: https://searchspheresource.com/llms.txt