Tail coverage applies to which liability policy type?

Tail coverage applies to which liability policy type?

• A. Occurrence
• B. Excess liability
• C. Claims-made
• D. Open liability

Answer: (C)

Tail coverage, or an extended reporting period, belongs to claims-made liability policies. In a claims-made policy, coverage is triggered when a claim is made during the policy period, not just by when the incident happened. If you end the policy, you risk losing the right to report claims that relate to incidents that occurred while the policy was in force unless you buy tail coverage. The tail keeps the door open for those late-filed claims after cancellation or expiration. Occurrence policies differ because they cover events that happen during the policy period regardless of when a claim is filed, so there isn’t a need for tail coverage to capture those later claims. Open or open-ended liability isn’t a standard policy type in this context, so it isn’t the right fit.

Tail coverage, or an extended reporting period, belongs to claims-made liability policies. In a claims-made policy, coverage is triggered when a claim is made during the policy period, not just by when the incident happened. If you end the policy, you risk losing the right to report claims that relate to incidents that occurred while the policy was in force unless you buy tail coverage. The tail keeps the door open for those late-filed claims after cancellation or expiration.

Occurrence policies differ because they cover events that happen during the policy period regardless of when a claim is filed, so there isn’t a need for tail coverage to capture those later claims. Open or open-ended liability isn’t a standard policy type in this context, so it isn’t the right fit.