Supplemental Extended Reporting Period
What Does Supplemental Extended Reporting Period Mean?
A supplemental extended reporting period is an additional time frame after a liability policy expires during which a policyholder can report a claim and still receive coverage. In many liability policies, claims made after the policy period ends are not covered. Supplemental extended reporting periods provide coverage for claims reported within a specified period following the expiration of the policy.
This kind of extension is most often attached to claims-made policies, which is the form used by most professional liability insurance contracts.
Insuranceopedia Explains Supplemental Extended Reporting Period
Supplemental extended reporting periods (SERPs) are particularly beneficial for companies that anticipate needing to file a claim after their policy period ends. Without a SERP, a company may be forced to bear the full financial burden of a claim, which could be devastating, especially for small businesses facing large claims. To obtain an SERP, policyholders typically need to request it and pay an additional premium.
The added premium for a SERP is a smaller line item when compared against what small business insurance costs over the life of a policy, and most carriers that sell general liability insurance will quote the SERP cost alongside the policy renewal.
