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🔎 '''Discovery period''' is a defined window of time — typically appended to a [[Definition:Claims-made policy | claims-made policy]] — during which an insured may report claims for wrongful acts or covered events that occurred before the policy expired or was cancelled, even though the report itself is submitted after the policy's active coverage period has ended. Often called an "extended reporting period" (ERP) or informally a "tail," this provision is critical in lines such as [[Definition:Directors and officers liability insurance (D&O) | directors and officers liability]], [[Definition:Professional liability insurance | professional indemnity]], [[Definition:Cyber insurance | cyber insurance]], and [[Definition:Errors and omissions insurance (E&O) | errors and omissions]], where the gap between an act and the discovery of resulting harm can be substantial.

⏳ Upon expiration or non-renewal of a claims-made policy, the insured typically has access to a basic discovery period — sometimes 30 or 60 days — included automatically at no additional cost. Longer extensions, ranging from one year to an unlimited tail, are available for an additional [[Definition:Premium | premium]], often calculated as a percentage of the expiring policy's premium. The discovery period does not create new coverage for acts committed after the policy term; it merely extends the reporting window for acts that fall within the original [[Definition:Retroactive date | retroactive date]] to policy expiration timeframe. [[Definition:Underwriting | Underwriters]] price extended discovery periods by analyzing the [[Definition:Development pattern | development pattern]] of the relevant [[Definition:Line of business | line of business]], since the likelihood and severity of late-emerging claims varies significantly between, say, a one-year medical malpractice tail and a three-year financial institution bond tail.

⚖️ The practical stakes of discovery periods surface most clearly during corporate transactions, professional retirements, and insolvency scenarios. When a company is acquired, the target's existing D&O policy often expires, and outgoing directors rely on a purchased tail to protect against claims arising from pre-closing conduct. In the United Kingdom and Australia, professional regulators may require departing practitioners to maintain [[Definition:Run-off insurance | run-off]] coverage that functions similarly. Failing to secure an adequate discovery period can leave individuals and organizations exposed to litigation years after the underlying policy has lapsed — a risk that [[Definition:Insurance broker | brokers]] routinely flag during [[Definition:Renewal | renewal]] negotiations. Across jurisdictions, the precise mechanics of how discovery periods interact with successor policies and [[Definition:Prior acts coverage | prior acts coverage]] vary, making careful policy wording review essential.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Claims-made policy]]
* [[Definition:Retroactive date]]
* [[Definition:Extended reporting period (ERP)]]
* [[Definition:Run-off insurance]]
* [[Definition:Prior acts coverage]]
* [[Definition:Tail coverage]]
{{Div col end}}

Definition:Discovery period - Revision history

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