View source for Definition:Extended reporting period (ERP)

📋 '''Extended reporting period (ERP)''' is a window of time after a [[Definition:Claims-made policy | claims-made policy]] expires or is canceled during which the insured may still report claims for incidents that occurred while coverage was active. Sometimes referred to as "tail coverage," the ERP addresses a structural gap unique to claims-made forms: without it, a [[Definition:Policyholder | policyholder]] who switches carriers or ceases operations could lose the ability to report valid claims simply because the old policy has ended. ERPs are especially prominent in [[Definition:Professional liability insurance | professional liability]], [[Definition:Directors and officers insurance (D&O) | directors and officers (D&O)]], and [[Definition:Medical malpractice insurance | medical malpractice insurance]], where claims often surface months or years after the triggering event.

⚙️ Most claims-made policies include a basic or "mini" ERP at no additional charge — typically 30 to 60 days — that activates automatically upon policy termination. Beyond that, insurers offer a supplemental ERP, purchased as an [[Definition:Endorsement | endorsement]], that can extend reporting rights for one, three, or even five years, and in some cases indefinitely. The cost of the supplemental tail is usually expressed as a percentage of the final annual [[Definition:Premium | premium]], often ranging from 75% to 200% depending on the line of business and the length of the extension. Once an ERP is triggered, no new [[Definition:Retroactive date | retroactive date]] issues arise — the coverage locks in the same scope that existed under the original policy.

💡 Failing to secure an adequate ERP can leave professionals and organizations financially exposed to latent claims they assumed were covered. For [[Definition:Insurance broker | brokers]] advising clients, the ERP conversation is a critical part of any transition between carriers, mergers, or business closures. On the [[Definition:Underwriting | underwriting]] side, ERPs represent deferred [[Definition:Loss reserve | loss reserve]] obligations that must be carefully modeled, because the insurer remains on the hook for reported claims long after the policy's active term — and premium collection — has ended.

'''Related concepts'''
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* [[Definition:Claims-made policy]]
* [[Definition:Retroactive date]]
* [[Definition:Occurrence policy]]
* [[Definition:Professional liability insurance]]
* [[Definition:Tail coverage]]
* [[Definition:Prior acts coverage]]
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