What Is an Extended Reporting Period?

An extended reporting period is a rider on an insurance policy allowing people to make claims after the policy has expired. These claims must concern events that occurred while the policy was still active. This type of insurance rider is most commonly seen with professional liability insurance, as it is the most likely to be associated with claims involving events that occurred in the past. For example, if a doctor carries malpractice insurance for a year and then drops it, a patient might sue for care provided in that year several years later. If the doctor had an extended reporting period, the insurance provider would respond to the claim.

Getting this coverage costs more, as it adds to the liability for the insurance company. In addition to being responsible for claims filed while the policy is active, it must also be prepared to handle claims during the extended reporting period. For the insured, the extended reporting period adds extra assurance of coverage in the event of switching policies or failing to renew insurance. It can be a cost-effective option when compared to the expense of handling a claim personally.

Customers who want an extended reporting period can discuss available options with an insurance agent. The policy must be in force before any claims can be made, and may not be added retroactively. Thus, someone can’t fail to renew insurance, become aware of a pending claim, and then request the extra coverage. People may want to consider this option if they will be switching insurers, or if they have concerns about remembering to renew.

Another option for insurance customers in the process of making a switch is a prior coverage policy. Under this rider, the new insurer agrees to make good on claims filed for services provided before the coverage took effect. It is effectively the opposite of an extended reporting period. Instead of asking the old insurer to accept liability for events that occurred under its coverage, the customer has the new insurer cover these. It is not necessary to carry both.

Professional liability insurance can be costly, especially with riders like an extended reporting period. People who are unsure about what kind of coverage they need and what sorts of limits would be advisable can meet with an insurance agent to discuss the options. It may also be helpful to talk to an attorney or to other people in the field. These consultants can offer advice on the types of claims that might be filed, the amounts, and how those claims might be handled.