An extension of the period during which claims can be reported after a claims-made contract expires, for events that predate it.
The extended reporting period is the mechanism that prolongs, after a claims-made contract expires, the period during which the insured can still report claims relating to triggering events that occurred before that expiry. It is the natural counterpart of the retroactive date, one bounding cover backward, the other forward. Its usefulness stems from the time lag inherent in liability cover, where a claim can arise long after the event that founds it. Without an extended reporting period, an insured who ends their contract, changes insurer or ceases their activity would find themselves without cover for late claims relating to their period of activity, even though they were insured at the time of the events. The length of this period varies, from a few years to an unlimited duration in certain cases of cessation of activity, notably for regulated professions. It is particularly crucial in professional liability and cyber, where the consequences of a fault or a flaw can surface belatedly, and its presence as well as its duration are major points of vigilance at subscription and at termination.
A consultant ceases their activity and takes out a five-year extended reporting period. Three years later, a former client blames them for a past error. The claim is covered thanks to this extension, even though they are no longer otherwise insured.
garantie subséquente, extended reporting period, tail cover, période subséquente