E&O Tail Coverage Explained


Errors and omissions insurance offers essential protection for businesses that provide services to clients. It covers claims of negligence, inadequate work, and misrepresentation, among many others. If you are planning on canceling your company’s E&O policy or if it has not been renewed by your insurer, it’s wise to consider acquiring tail coverage, also known as an ERP, for your plan. This will ensure that you and your employees are protected for as long as necessary.

What Is an E&O ERP?

E&O insurance is typically claims-based, meaning that it will only cover claims made while the policy is active. Once the plan expires, you will be responsible for any claims made against you. E&O tail coverage extends the time period during which claims can be made against the policy. However, it still only covers incidents that occurred during the time the plan was active.

How Long Does an ERP Last?

Insurers offer several types of extended reporting periods. A basic ERP usually lasts 30 or 60 days after the expiration of the policy. A supplemental ERP can last much longer: anywhere from one to five years. Unlimited tail coverage may also be available, depending on the terms of your original policy.

Finally, it’s important to note that you should contact your insurer immediately if you need an ERP, as there may be a time limit restricting when you can apply for this coverage.  Some insurers require it to be in effect on the expiration date of your original policy. Others allow a 30-day grace period.