A discovery period is an important consideration when an organisation does not, or cannot, replace a policy at expiry. Without a current policy in place, an organisation and its management may be exposed to claims without support. In such situations, a discovery period can allow the notification of claims and circumstances for a certain period of time.
In this article, we will explore the concept of a discovery period in the context of the following coverages:
- Directors and officers liability insurance
- Employment practices liability insurance
- Management liability insurance
- D&O insurance for nonprofits
You may also find that similar concepts apply to a broad range of financial lines insurances, such as professional indemnity insurance, cyber insurance, and even crime insurance to a certain extent. Keep in mind, however, that each policy is strictly interpreted according to its own terms and conditions.
Contents
1 Discovery period: A definition
2 Its relationship to a claims made policy
3 The consequences of prior acts coverage
4 The importance of maintaining a current policy
5 Types of discovery period in the event of non-replacement
6 Discovery period: An example
7 Conclusion
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