Extended ReportingUnderstanding Extended Reporting Period (tail policy) on a Professional Liability policy for Design Professionals.  Extended Reporting Period, also called tail policy or ERP, is an extended period of time after the end of the policy period for reporting claims to the insurance company.  The policy must be cancelled or non-renewed by either the insurance company or by the named insured (design firm).

Many insurance companies offer an automatic extended reporting period (ERP) for 60 days.  After the 60 days your firm will not be able to report a claim unless an optional extended reporting period is purchased.  There are several options when it comes to the time period of optional extended reporting period.  Most common are one, three or five years.  Written notice and payment in full will be required by the insurance company.  The cost of the extended reporting period varies but here is an example of what one may look like:

  1. For a one (1) year extended reporting period, 125% of the annual premium for the policy;
  2. For a three (3) year extended reporting period, 225% of the annual premium for the policy; or
  3. For a five (5) year extended reporting period, 300% of the annual premium for the policy.

Your firm may not get an extended reporting period if the insurance company cancels or non-renews the policy due to nonpayment of premium or noncompliance of the terms and conditions of the policy by the named insured (design firm).

Even though your firm is currently ‘open for business’ be sure you understand the extending reporting period options available in your Professional Liability policy for when you are retiring or deciding to close your business.  Your PUI Agent is here to help with questions on the policy, please call or email.