Extended reporting period is an insurance policy rider that allows claims to be filed after the policy has expired, but only for events that occurred while the policy was active. It is often associated with professional liability insurance and can be a cost-effective option. Pre-coverage policy is another option for insurance customers in the process of making a change. It is not necessary to carry both.
An extended reporting period is a rider on an insurance policy that allows people to file claims after the policy has expired. These claims must refer to events that occurred while the policy was still active. This type of insurance clause is most often seen with professional liability insurance, as it is more likely to be associated with claims involving events that occurred in the past. For example, if a doctor has medical malpractice insurance for a year and then cancels it, a patient could sue for the care provided that year several years later. If the doctor had an extended reporting period, the insurance provider would respond to the claim.
Obtaining this coverage costs more, since it increases the liability of the insurance company. In addition to being responsible for claims filed while the policy is active, you must also be prepared to handle claims during the extended reporting period. For the insured, the extended reporting period adds an additional guarantee of coverage in the event of policy changes or non-renewal. It can be a cost-effective option compared to the cost of handling a claim in person.
Clients who want an extended reporting period can discuss available options with an insurance agent. The policy must be in effect before claims can be made, and it cannot be added retroactively. Therefore, someone cannot fail to renew insurance, become aware of a pending claim, and then apply for the additional coverage. People may want to consider this option if they are changing insurers, or have concerns about remembering to renew.
Another option for insurance customers in the process of making a change is a pre-coverage policy. Under this rider, the new insurer agrees to honor claims submitted for services rendered before coverage becomes effective. It is effectively the opposite of an extended reporting period. Instead of asking the old insurer to accept responsibility for events that occurred under its coverage, the customer has the new insurer cover them. It is not necessary to carry both.
Professional liability insurance can be expensive, especially with passengers like an extended reporting period. People who are unsure about what type of coverage they need and what type of limits would be recommended can meet with an insurance agent to discuss options. It may also help to talk to a lawyer or other people in the field. These consultants can offer advice on the types of claims that can be filed, the amounts, and how those claims can be handled.
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