Extended Reporting Period Clause (D&O/E&O)
The extended reporting period allows an insured under a claims-made policy to report claims for wrongful acts committed before policy termination even after the policy has expired or been cancelled, without reopening the covered period itself.
- Clause type
- Extension
- Origin/Market
- International programme
- Favours
- Insured
- Negotiability
- Negotiable
Purpose
D&O and E&O policies are almost universally written on a claims-made basis: cover only applies if the claim is reported during the policy period. If the policy ends — through merger, insolvency, cancellation, or simply a change of carrier — this otherwise creates a gap for wrongful acts committed during the policy period but reported only afterwards. The extended reporting period closes that gap by extending the reporting window, not the period during which the wrongful act itself must have occurred.
Effect and limits
The market distinguishes between an automatically granted, free “basic ERP” (usually 30–60 days) and a paid “supplemental ERP” (one to several years, sometimes unlimited). The premium for a supplemental ERP typically runs between roughly 100% and 300% of the expiring annual premium, depending on duration and risk profile. Importantly, the ERP only covers wrongful acts committed before policy termination — new conduct after that date is never covered, and an exhausted aggregate limit under the original policy is likewise unavailable to the ERP.
Negotiation and practice
Purchasing a supplemental ERP is usually only possible within a narrow window (often 30–90 days) after policy termination and should be actively considered in connection with M&A transactions, business wind-downs, or a change of carrier. Alternatively, on a carrier change, a “full prior acts” arrangement can be negotiated with the new insurer, achieving the same protective effect without a separate ERP premium.