A provision found within a claims-made policy that permits an
insured to report claims that are made against the insured
after a policy has expired or been canceled, if the wrongful act that
gave rise to the claim took place during
the expired/canceled policy.
Tail coverage requires that the insured pay additional premium.
For example, assume that a claims-made policy with a January 1,
2015-2016, term contains tail coverage with a term of January 1,
2016-2017. Also assume that the insured did not renew the policy
when it expired on January 1, 2016. Under the tail coverage, the
insured will be able to report claims to the insurer during the
January 1, 2016-2017, period of tail coverage, provided the claim
resulted from a wrongful act that took place during the expired
January 1, 2015-2016, policy term.
Tail coverage, which is synonymous
with extended reporting period provisions, includes several important
features: (1) the coverage applies only if the wrongful act giving
rise to the reported claim took place
during the expired/canceled
policy period. Thus, there is no tail coverage available for wrongful
acts if committed
during the period of tail coverage. (2) Tail coverage
applies for a limited time period, generally 1 year. (3) Purchasing
tail coverage for a specific time period does not reinstate the
policy's aggregate limit of liability.
Extended reporting period.
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PLI VIII.D; TRR