Directors and Officers (D&O) insurance protects companies and their leadership from legal actions from management decisions. An Extended Reporting Period (ERP), often called a "tail," is a crucial component of D&O insurance.
This extension enables companies to report claims for directors' and officers' liabilities even after the policy expires, ensuring continued coverage for past incidents. The decision to purchase an ERP involves weighing the advantages of prolonged coverage against associated costs and time limits, proving essential for addressing potential legal challenges beyond the standard policy period and how D&O affects business decisions.
Advantages:
Continued D&O Coverage after Policy Ends:
An Extended Reporting Period (ERP), often called a tail, provides an extension for reporting claims related to Directors and Officers (D&O) liabilities. It allows a company to report claims for incidents that occurred during the D&O policy period but are reported after the policy has ended.
Protection for Past D&O Actions: