Extended reporting period coverage is an endorsement to a claims-made liability policy. It provides coverage for claims that are reported after the policy has expired, but which arise from incidents that occurred during the policy period. As an example, if a physician retires and cancels their medical malpractice insurance, extended reporting period coverage would protect them from claims filed after retirement for actions taken while the policy was active.
The significance of this type of coverage lies in its protection against potential future liabilities. In many professions, the lag time between an incident and the filing of a claim can be substantial. This coverage ensures continuous protection even after the original policy’s termination, mitigating financial risks associated with delayed claims. Historically, its development addressed gaps in standard claims-made policies, providing a more complete risk management solution.
