What is the Difference Between Tail Coverage and Extended Reporting Coverage?

insurance tail coverage definition

The short answer to the question Whats the difference between tail coverage and extended reporting coverage? is that there is no difference. A solid insurance tail coverage definition can tell you why.

Tail coverage is a benefit to various forms of errors and omissions insurance, including lawyers professional liability insurance and different types of malpractice insurance. Those insurance products are written on a claims-made basis. For the insurer to cover the claim, the claim must be made against the business professional and reported to the insurance carrier during the time the policy covers. For example, if the liability policy covers the insured between January 1 and December 31, 2018, the claim must be made during that same time frame.

For claims made within a reasonable time after the expiration of the policy, extended reporting coverage will allow coverage of those claims. Because that benefit occurs after the policy has expired, or at the tail end of the coverage, it is sometimes called tail coverage.

Those insured by tail coverage must remember that extended reporting coverage typically comes with a time limit, usually no more than a year after the expiration of the original policy. Also remember that work conducted after the expiration period, but during the tail coverage period, will not be covered.