An extended reporting period is an important consideration for an organisation following a material change to its ownership or corporate structure. Merger and acquisition activity can certainly be exciting, however, it will also have an effect on a policy’s coverage. Without prudent deliberation, management can be exposed to claims arising well into the future.
In this article, we will explore the concept of an extended reporting 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 Extended reporting period: A definition
2 Its relationship to a claims made policy
3 The consequences of prior acts coverage
4 What is a change in control?
5 Why does a policy convert into run off?
6 How a policy’s conversion affects coverage
7 How is an extended reporting period implemented?
8 Calculating the price of an extended reporting period
9 Extended reporting period: An example
10 Conclusion
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