Tips for Successful ERP Coverage

Tips for Successful ERP Coverage

insurance tail

When you are making a change in your business, and thus in your insurance policy, it is important to have an insurance tail. Tail coverage, or extended reporting period coverage, allows you to report claims on issues that occurred while your policy was current even after it expires or is canceled. Here are a few tips to follow to increase the likelihood that your ERP provision works the way it’s designed to work.

First you must decide how much tail coverage you need. As a general rule, you want to extend your coverage as long as you can. Best practices suggest at least three years, but some carriers allow you to extend up to ten years. The longer a tail you can get, the better you are covered.

A bilateral insurance tail is important, because it protects you whether you or the insurance company cancels the policy. It is also crucial that you do not rely on the fact that your business has closed to avoid liability. An ERP add-on could protect you against negligence claims made against you personally, helping to keep your business and personal assets separate.

No matter why your E&O insurance policy term ends or who ends it, you can benefit from ERP coverage. This provision continues to protect your business after the policy itself has expired.