Businesses, big and small, rely on a variety of insurance products to help manage their operational risks. Common products such as property or workers’ compensation coverage are widely understood to be necessary to protect a company’s financial interests against claims. Many business-specific coverages such as errors and omissions (E&O), directors and officers (D&O), employment practices liability and more offer certain types of protections for a company when it comes to work produced and employee interaction. You might have several of these policies, but is it enough?
What is Tail Coverage?
Tail coverage or standalone extended reporting coverage (ERP) is an endorsement that under certain conditions allows a company to maintain coverage. What if you’re selling or offloading your business, but there’s an outstanding claim? Standalone ERP endorsements provide options for modifying the costs, conditions and maximums for a particular policy. A typical ERP allows the formerly insured extra time to report past claims.
Do I Need This Protection?
Each business has unique risks and needs when it comes to insurance protection. Businesses that are ceasing or changing operations should strongly consider a tail policy endorsement to cover themselves with additional time to report. It’s important that you find the right insurer who can help you figure out the best products for tail coverage.