Tail Coverage for Your Business
Insurance coverage contracts are generally set according to a timeline of six months to one year worth of coverage. Premiums are sometimes paid monthly through those periods, although others may require quarterly or in-full payments at the time policy is established. However, some providers also offer a tail period of coverage. This is a specified period of time where claims can still be reported against the insurer even if the policy has expired.
Do You Have Extended Coverage?
As the team at Axis Insurance Services advises, you can check with your current policy about existing tail options or you can purchase a separate ERP insurance policy. Many times a business will take out the additional policy, as it helps limit potential liabilities if the company is closing or is canceling an insurance coverage and won’t be replacing coverage. A business that has an occurrence-based policy could also have a potential gap between the occurrence reporting period and incident, thereby needing the extension of coverage.
Type of Tail Coverage
If you are considering the additional coverage, there are two types of tail coverage
- One-Way Tail. This coverage is offered by the insurer, potentially due to policy cancellation, non-renewal situations or the coverage is rewritten.
- Two-Way Tail. This coverage can be provided by either the intent of the insured or the insurer in the cancellation or non-renewal of a policy.