You have spent years building your reputation, serving clients, and handling every matter with care. But what happens after you retire, change firms, or close your practice? For many attorneys, the real risk appears later when a former client files a claim about work completed long ago.
If your coverage ends when you step away, that claim could impact your finances, career, and peace of mind in a very real way.
That is where Extended Reporting Period (ERP) coverage, also known as “tail coverage”, becomes incredibly important. This often-misunderstood protection keeps your past work covered even after your active policy ends. Whether you are merging, selling your practice, or planning for retirement, taking time to understand your ERP options can be one of the smartest decisions you make for your future self.
Claims happen. Confusion should not. Attorneys often misunderstand the need for an ERP endorsement on their claims-made and reported policy when coverage is not renewed, and that misunderstanding can leave past acts unexpectedly unprotected.
In this article, you will find a clear explanation of what you need to know:
Let us break things down so you can move forward with confidence.
Extended Reporting Period (ERP) is the formal term for an endorsement that protects past acts on a forward-going basis after a claims-made policy is not renewed. “Tail Coverage” is the informal term commonly used to describe protection of prior acts, either during or after an active policy. Because both agents and insureds often use these terms interchangeably, misunderstandings can occur.
For instance, an attorney may ask about tail coverage during renewal. The agent may confirm that prior acts coverage remains in place, while the attorney was actually asking about ERP options if they decide not to renew the policy at all.
In short, when using the term “tail coverage”, clarity and context matter. Being specific about what you’re asking for helps ensure you receive the protection you truly need.
Endorsements are additions to an insurance policy that tailor coverage to the insured’s specific needs. An Extended Reporting Period Option (ERP) endorsement does exactly that. It extends the time for reporting claims under the policy that arise from prior work performed.
It does not extend coverage for new work. It only protects your past acts insured under the policy.
This makes an ERP especially valuable when an attorney leaves a firm, closes a practice, or faces any change that stops their current claims-made policy from renewing.
Another important note is that the policy will have a strict deadline for issuing an ERP option after the policy’s cessation. Each policy has different requirements, so it’s essential to review this section in advance to understand when the ERP must be purchased to ensure prior acts protection.
For claims-made and reported policies, such as Lawyers Professional Liability Insurance, continuous coverage is paramount to maintaining prior acts protection. When a policy is canceled or not renewed, a gap in coverage is created, and any claim reported after the policy ends would not be covered.
Purchasing an Extended Reporting Period (ERP) option prevents that gap. The endorsement keeps the policies’ reporting window open, allowing the insured to report claims that arise from past work, even after the policy has not been renewed.
Extended Reporting Period options vary by carrier, so it is critical to review this portion of your policy before purchasing or renewing coverage. Choosing a policy that doesn’t align with both your immediate and future needs could leave you exposed at the moment you need protection most.
Some policies provide a “mini-tail” that gives a brief 30 to 60-day extension to report claims after the policy has lapsed or been canceled. When available, it’s automatically triggered after the policy’s termination date at no extra cost.
Many policies offer short-term ERPs ranging from 12 to 60 months. These endorsements are not renewable; once they expire, no further coverage applies.
Some policies provide an “Unlimited” ERP option. This is where the term “tail coverage” is often used interchangeably. An unlimited ERP has no expiration date. It remains in effect until the limits of liability are fully exhausted.
Certain carriers offer a Non-Practicing ERP, which is typically unlimited. Often called the “Retirement Tail,” this option applies when an attorney retires from the practice of law.
One of the biggest advantages occurs when a carrier offers a Non-Practicing Tail at no additional cost after maintaining continuous coverage for a set number of years.
For example, Attorney Tom has been insured with ABC Insurance for 10 consecutive years. ABC Insurance offers a free Non-Practicing ERP after 5 consecutive years of coverage. If Attorney Tom retires, he would qualify for an Unlimited Tail at no additional cost.
The cost of an ERP option varies by carrier and is often listed in the policy as a percentage of the current premium. Typically, a 12-month ERP costs around 100% of the expiring policy premium and increases as the reporting period extends. Unlimited tail options generally range from 200% to 300% of the premium.
Because pricing and terms can differ significantly, it’s vital to review and understand your policy’s ERP options in advance. Doing so allows you to choose coverage that aligns with your needs and plan financially for your future transition.
For example, if your current premium is $3,000 and your policy lists the cost of an Unlimited ERP as 250% of the premium, securing the Unlimited Tail would cost $7,500.
Price vs. Value: Making Informed Choices When Shopping for Lawyers Professional Liability Insurance
In short, no. Once the ERP endorsement is issued, it cannot be modified, extended, or renewed after it expires or after the limits of liability are exhausted.
The purchase is final, and once the endorsement expires, there is no further coverage for any past acts, errors, or omissions previously covered by the policy.
There are several situations where purchasing an Extended Reporting Period (ERP) option is necessary to protect your prior acts and ensure your coverage continues without a gap, especially when your business structure or future plans are changing.
Consider an ERP when you are:
If your law firm is undergoing major changes, review your policy and consult with your agent to fully understand your options and the implications of your decisions.
Timing is vital when buying or exercising an ERP option. Many policies require the ERP endorsement to be issued within 30 or 60 days. After this period, the Extended Reporting Period option will no longer be available, and there will be no coverage whatsoever should a claim arise.
Remember, with a claims-made and reported policy, you must either renew coverage or purchase an ERP to maintain continuous protection. Once the ERP expires or the limits are exhausted, no further coverage, including prior acts coverage, will be available.
When changes occur in your legal practice or career, your policy should change as well. Whether you refer to it as an Extended Reporting Period (ERP) endorsement or “tail coverage”, clear communication matters. It’s easy for misunderstandings to arise when discussing a renewal versus adding ERP coverage.
An ERP endorsement extends the time allowed to report claims under your policy. The original policy’s coverage limits and deductible still apply and cannot be changed once the ERP is issued. That is why securing the right coverage levels at renewal is important before choosing an ERP option.
ERP options and costs can vary by carrier and policy form. Review your current policy, talk with your agent, and fully understand your choices. One key point remains consistent: once an ERP is purchased, it typically cannot be extended, renewed, or modified.
The timing of ordering and issuing an Extended Reporting Period option is vital. Missing the deadline specified in the policy will put prior acts coverage at risk.
You should consider an ERP when closing your practice, merging with another firm, changing your business entity, selling your practice, retiring, or simply not renewing your policy. Failing to renew or add an ERP endorsement to a claims-made policy puts all prior acts coverage at risk, leaving you exposed to claims from past work.
With the right planning and guidance, you can protect the career you have built and step into your next chapter with confidence.
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Claims-made and reported policies can be tricky to navigate. This article explains how timing, retroactive dates, and tail coverage affect your legal malpractice protection, and how to avoid costly gaps in coverage.
Daniels-Head Insurance Agency has been chosen by the attorney audience of the Texas Lawyer as a 1st Place winner of the “Best Of” reader's survey for 2025!
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