Missed Extended Reporting Period Endorsement Deadline can be Costly-Bad Idea-Part VI

Extended Reporting Period Endorsement (ERP or Tail) have very specific deadlines and requirements.  There is no underwriting that takes place and except for very limited circumstances the right to purchase the ERP cannot be taken away by the insurer.  But the right can be lost by the insured.  The right to purchase is very important if the firm is being non-renewed because of claims activity or the firm is dissolving.

Most policies state specifically that the written request and full payment must be to the insurer within 30, 60, or 90 days after coverage termination.  (To the insurer does not mean that the ERP request has been put in the mail.)  Read the policy details dealing with ERP rights carefully and timing.  Get the instructions for sending the ERP request and payment before sending.

If you are sending the ERP request to your agent, make sure that you send it with enough time for the agent to get payment and the request to the insurer.  Make sure that the agent is expecting payment and the request.  Assuming that just because you mailed a request for ERP with payment to the agent or the insurer does not mean it will happen.  It is recommended that you send it via overnight mail or if e-mailed return receipt request.  You should follow-up with your agent if your agent does not acknowledge receipt of the request and payment on a timely basis.  If the policy states 30 days, it does not mean 31.  Whatever the policy deadline I have never seen it waived by even one day.  A day late and this right vanishes forever.