Extended reporting coverage is also known as tail insurance. It is an add-on policy to a general professional liability insurance plan that provides coverage for situations when an incident occurred during the time period the general policy was in effect, but the related claim wasn’t made until after the policy expired. Note, it does not provide coverage for incidents that happen during the period that the tail policy is in effect. Here are four things to consider when buying extended reporting coverage.
Premiums for tail insurance are likely to be high. Some general insurance plans may offer free tail coverage, but this often relates only to specific situations like retirement or death.
2. Insurance Limits
As with all forms of insurance, it is a good idea to understand your insurance limits. Tail policies are often written for a limited amount, which you could use up if multiple claims are filed against your business.
3. Purchase Period
There is typically a small window where you can buy extended reporting coverage. Depending on the provider, you may have 10 or 30 days from the time your original policy expires to buy tail coverage.
4. Length of Tail Insurance Coverage
There are one-year to multi-year plans to choose from, depending on your risk tolerance, risk management strategy and budget. You can usually select from variable and fixed options.