What is an Extended Reporting Period and Why is it Important?
Many of you are already aware that your Professional Liability Policy through the American Academy of Attorney-CPAs is a Claims-Made Policy. The claims-made policy provides cost advantages but also allows you to insure the risks resulting from past services under your present policy. If we don’t see cancellations or lapses in coverage, we can approve Retroactive dates on our policies going back many years.
One of the important features of a claims-made policy is that you must have a current policy in force to submit a claim. Once premiums stop the coverage stops. Even if the alleged incident occurred while the policy was in force, a claim submitted to the insurance company after the coverage period will not be covered.
That is where an Extended Reporting Period Endorsement can really come in handy. Whether you are nearing retirement, winding down operations or making a career change please take the time to look over our Extended Reporting Period Coverage. The Extended Reporting Period Endorsement affords extra time for reporting claims to the insurance company. It is often referred to as “tail” or “tail coverage.”
Another scenario that can come into play is if your policy is cancelled or non-renewed and you cannot find immediate replacement coverage, the ERP endorsement is available in most situations. Our product with Lloyds would help with this issue by providing a 12-month extension at 130% of the policy premium.
The cost may seem high for this endorsement but with the societal changes that have increased claim frequency, we suggest evaluating the need for the coverage. The first-year premium cost will be 100% of your expiring policy premium with future years at discounted rates. The coverage can be purchased up to 5 years after your policy has expired and can even be purchased longer up to underwriter approval.
Please contact Hays Companies with any questions regarding your current coverage or if you have the need for our Extended Reporting Period Endorsement in the near future.
Account Administrator- Sam McFee
Direct Phone 612-758-8477