What does Long Tail Liability mean? Read on to discover the definition & meaning of the term Long Tail Liability - to help you better understand the language used in insurance policies.
Long Tail Liability
The liability for claims that do not proceed to final settlement until a length of time beyond the policy year. High incurred but not reported (IBNR) claims contribute to this "tail" effect, since these losses are usually not settled until several years after the expiration of the policy in question.
We hope the you have a better understanding of the meaning of Long Tail Liability.