Extended Reporting Period (ERP)
Your firm may have decided not to renew your professional liability policy due to retirement, or the firm is closing. Your firm has the option to obtain an extended reporting period. The extended reporting period is an extended period of time that a claim can be reported to the insurance company. There are some things to keep in mind when considering an extended reporting period.
The first issue to keep in mind is that all projects must be completed to purchase an extended reporting period. Your firm cannot have any ongoing projects for the extension.
Each insurance company will have different options for an extended reporting period. Be sure to read your firm’s policy to understand what your options are. Here is an example of an extended reporting period.
The additional, non-refundable premium for an optional Extended Reporting Period shall be:
(a) one hundred percent (100%) of the annual premium for a one (1) year Extended Reporting Period;
(b) one hundred seventy-five percent (175%) of the annual premium for a three (3) year Extended
Reporting Period; or
(c) two hundred fifty percent (250%) of the annual premium for a five (5) year Extended Reporting Period.
The extended reporting period premium will be based on the expiring premium of your firm’s policy. For example, if your firm chooses the 5-year extended reporting period and your expiring premium is $5,000, the total for the extended reporting period is $12,500. This premium must be paid at the time the endorsement is requested and cannot be financed.
The extended reporting period is not renewable. Meaning that once the extended time your firm chooses is up, there is not another policy that can be put in place.
If you have any questions about an extended reporting period on professional liability policies please call, or email, your Professional Underwriter agent for assistance.