Tail Coverage/ Extended Reporting Period (ERP)
Licensees insured through one of RISC’s programs who do not renew their RISC insurance for any reason should consider obtaining tail coverage by purchasing an ERP endorsement.
Our policies are claims-made-and-reported policies, which means they apply to claims that are both made and reported during the individual policy period or any applicable ERP. Claims often arise years after a transaction occurs. What happens if a claim is made after your policy expires depends on whether an ERP is in effect. An ERP extends the reporting date of your policy so that it applies to claims made and reported after the end of the individual policy period and before the end of the ERP.
All of our policies include an automatic 90-day ERP in the event the insured licensee’s license is retired, inactivated, or allowed to expire. This allows the policy to apply to claims first made and reported up to 90 days after the effective date of the cancellation or nonrenewal, provided the subject professional services occurred after the retroactive date and before the effective date of cancellation or nonrenewal.
Optional ERP endorsements may be purchased to cause the policy to apply to claims first made and reported up to a specified number of years after the effective date of cancellation or nonrenewal, provided the subject professional services occurred after the retroactive date and before the effective date of cancellation or nonrenewal. ERP endorsements can only be purchased within 90 days after the licensee’s policy has terminated.
Common situations where ERP endorsements should be considered:
- Moving to a real estate firm with an E&O policy issued to the firm as the named insured. The firm’s policy may not cover claims that may arise against you related to professional services you provided before joining the firm.
- Retiring or inactivating your license.
- Death (planning for the heirs of your estate.)
Contact us at 1-800-637-7319, extension 1 if you have any questions or concerns.