TAIL Coverage OR Extended Report Period

TAIL This term has been used to describe both the exposure that exists after expiration of a policy and the coverage that may be purchased to cover that exposure. Also known as an extended reporting period. It's an optional add-on applicable to claims-made insurance policies. Example: Imagine you have professional liability insurance (claims-made) for your business. You cancel the policy in December. In February (after the policy cancellation), a client sues you for malpractice based on your work in October (while the policy was active). With tail coverage purchased for your December policy, this claim would be covered. Claims tail may extend for years after policy expiration, and the losses may be covered. It allows you to file a claim against your expired or cancelled policy for an incident that: -Happened during the policy period. -Was not reported before the policy ended. Tail can be applied in the case of a Claims-Made or Occurrence Policies: 1-Claims-Made: Coverage applies to claims reported during the policy period, even if the incident happened earlier. On “claims made” forms tail coverage may be purchased to extend the period for reporting covered claims beyond the normal policy period. 2-Occurrence: Coverage applies to incidents that occurred during the policy period, regardless of when the claim is filed. Tail coverage is particularly relevant for businesses with: Long tail exposures: Professions where claims might arise much later, such as errors and omissions in professional services. Frequent policy changes: Businesses that switch insurance providers often. It is important to note that tail coverage typically involves an additional premium. The duration of the extended reporting period can vary depending on the policy and your needs. #BeNewinsurance #InsurTech #inclusiveinsurance #insurance #reinsurance #takaful