Glossary / Timing & triggers / Tail Coverage

Tail Coverage

Also known as: Extended reporting period · ERP · Run-off coverage

Timing & triggers

An option that extends the time to report claims after a claims-made policy ends.

Tail coverage, formally an extended reporting period (ERP), lets you report claims after a claims-made policy has expired or been cancelled, as long as the underlying act occurred during the policy period. Claims-made policies (common for D&O, Tech E&O, professional liability, and cyber) only respond to claims first made while the policy is active. When you switch carriers, let a policy lapse, or wind the company down, tail coverage prevents a gap where an old act surfaces as a new claim with no active policy to respond. It is frequently needed at an acquisition, a shutdown, or a change of insurer.

Where you'll see it

PolicyEndorsementMSA

Why it matters for your business

  • Claims-made policies stop responding once they end, so a claim reported afterward can fall through the cracks without tail coverage.
  • It is commonly required or advisable at an acquisition, a company wind-down, or when switching carriers.
  • Directors and officers often want run-off (tail) coverage to protect them for decisions made before a change in control.
  • The cost is usually a one-time percentage of the expiring premium for a set number of years.

People also ask

What is tail coverage?

Tail coverage, or an extended reporting period, lets you report claims after a claims-made policy ends, provided the underlying act happened during the policy period. It closes the gap that would otherwise exist when a claims-made policy expires or is cancelled.

When do I need tail coverage?

Most often when you switch insurers, let a claims-made policy lapse, get acquired, or shut the company down. In each case an act from the past could still surface as a claim, and tail coverage keeps a policy available to respond to it.

Ready to take the next step?

Definitions are educational and may be modified by your specific policy language, endorsements, and state rules. For regulatory guidance, refer to the California Department of Insurance or the NAIC.

Reviewed by Andrei Craciunescu, CA Licensed Insurance Broker #4467994

Last updated: July 2026.