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Extended Reporting Periods; ‘ERP’s AKA “Tail Policies”.

September 8, 2020 0 Comments HeatherG

Extended Reporting Periods; ‘ERP’s AKA “Tail Policies”. What is an ERP?
An extended reporting period (ERP) is an option that lies within your claims made professional liability insurance policy. It allows you to report claims even after your policy expires. This policy endorsement is also known as tail coverage.
What types if ERPs are available?
a. Automatic Extended Reporting Period. Insurers often provide a free extended reporting period of 30 or 60 days after a policy is canceled or not renewed. This is sometimes referred to as a basic ERP.
b. Supplemental Extended Reporting Period. This option can sometimes be purchased from your insurance provider, typically ranging from one to five years. Unlimited periods are also available. Some carriers only offer an ERP if the insurer cancels or non-renews your policy.
c. Retirement, Death or Disability Extended Reporting Period. Most policies offer free unlimited individual ERPS for these events. There may be a requirement that you be insured by the carrier for a specific amount of time to qualify for a free ERP.
Why would you need an ERP?
If someone attempts to sue you for an insurable event that happened while your claims-made insurance policy was active, an extended reporting period will provide coverage even after the policy is canceled.
Examples of how an extended reporting period can benefit your business:
i. If the firm is dissolving an extended reporting period lets you cancel your existing professional liability insurance, without losing coverage on your prior work activities.
ii. If you are retiring an extended reporting period continues to protect the work you did under your former policy.
iii. If your firm is being cancelled by your carrier due to claims and no other carrier is willing to offer Prior Acts Coverage under their policy. Without it, you are only insured for incidents that happened while your new policy is in force.
How much does an ERP Cost?
Insurers typically charge a fixed percentage of your professional liability insurance policy cost, often between 100% and 300% of your final premium, depending on the supplemental ERP length.
You may think all brokers, policies, carriers and quotes are the same - but they are not. At Lawyers Choice you get so much more! We are a Trusted Advisor to our clients. Our firms rely on us for advice regarding adding attorneys and how to classify them, on 'when' and 'if' they should report a claim, insurance options when dissolving a firm or retiring, and so much more.
Our agents are also attorneys with law firm experience and a personal understanding of the needs and concerns of the clients we serve. We are able to see where we can enhance a policy with special coverages that are often unknown to our clients. Our experts are skilled at reducing premiums by securing credits and discounts that many other agents miss. Underwriting is not limited to just what’s on an application; we know what information will trigger discretionary credits which can often reduce a premium by 10%-15%.

Malpractice Insurance Basics Webinar Episode #4: Common Supplementary Payments within your Lawyers Professional Liability (LPL) Policy.
Malpractice Insurance Basics Webinar Episode #3: Extended Reporting Period (ERP) A.K.A. Tail Policy
Malpractice Insurance Basics Webinar Episode#2: How Application Answers Impacts Premium and Coverage

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