Discovery Period

What Does Discovery Period Mean?

The discovery period is the time after an insurance policy’s maturity during which the insured is permitted to identify any losses that occurred while the policy was in effect and file a claim.

Insuranceopedia Explains Discovery Period

The discovery period may also refer to the grace period during which the insured can report losses after canceling a bond or contract. If these losses are reported within this time and are proven to have occurred during the covered period of the bond or policy, the insurance company or original surety must pay the claim.

Discovery periods come up frequently in commercial crime insurance and fidelity bonds, where employee theft or fraud may not be noticed until well after the act. They also apply to claims-made policies like professional liability insurance, where a client might not realize a covered error occurred until the policy has already expired.

Typically, the discovery period lasts for one year.