The extended reporting period may also be referred to as a tail policy. The extended reporting period is an extended period of time that a claim can be reported after your firm has not renewed your professional liability policy.
A few notes to be aware of when considering the extended reporting period. All projects must be completed before your firm is able to obtain the extension. The extended reporting period is not renewal, so the time period you choose will be the only extension available. The premium for the extended reporting period is based on your firm’s expiring premium and is due, in full, at the time the extended reporting period is requested.
With all of that said, some firms may sell their business and then request an extended reporting period. This will cover your firm’s past liabilities that may arise. The request will also depend on the buy/sell agreement your firm has set up with your attorney and the purchasing firm. Some firms will start to wind down their business and then once all projects are complete can purchase the extended reporting period.
The extended reporting periods will vary with each insurance company, but most will offer a maximum of up to 5 years.
If you are retiring from a firm and are concerned about how you might be covered. Check with your firm’s insurance agent. Most policies will cover past employees and retirees as long as the policy remains active. Some insurance companies will offer a retiree policy.
If your firm has any questions with regards to extended reporting periods, please call, or email, your Professional Underwriter agent for assistance.