Extended Reporting Period (ERP)
An extended reporting period is an optional provision that allows claims to be reported after a claims-made policy has expired or been cancelled, covering incidents that occurred during the original policy period.
The extended reporting period, commonly called tail coverage, is a critical safeguard for apartment owners who carry claims-made policies for coverages such as employment practices liability, directors and officers liability, or professional liability. When a claims-made policy is cancelled or not renewed, the right to report claims under that policy ends immediately—unless an ERP is purchased. The ERP extends the reporting window, typically for one to three years, though some policies offer an unlimited tail.
For apartment owners, the most common ERP scenario involves switching EPLI carriers. Employment-related claims such as wrongful termination, harassment, or discrimination often surface months or years after the underlying conduct. Without an ERP on the expiring policy, an owner who switches carriers could face an uncovered claim for conduct that occurred during the prior policy period but was reported after that policy ended. The new carrier's retroactive date may not extend back far enough to pick up the claim, leaving the owner uninsured.
ERP pricing varies but typically ranges from 75% to 200% of the expiring policy's annual premium for a one- to three-year tail. Some policies include a basic ERP—usually 30 or 60 days—at no additional cost when the insurer cancels or non-renews the policy. Apartment owners should negotiate the ERP terms and pricing before binding a claims-made policy, not after, because the cost of tail coverage can significantly affect the total cost of the insurance program over time.