In the event that your claims-made insurance policy is canceled, an extended reporting period (ERP) provides the coverage you need if someone tries to sue you for an event that occurred while your policy was still active. To get the most out of this crucial form of business insurance, it’s important to understand how it works and who can benefit from it.
Situations That Require an ERP
Business leaders who find themselves in the following situations can greatly benefit from an ERP:
- Ceasing of operations
- Selling the business
- Switching to a new occurrence policy
In the case of ceasing operations or selling their business, managers should consider investing in ERP insurance, especially if they have claims-made coverage. The experts at Axis Insurance remind business owners that many claims occur months or years before a company closes down. Therefore, having an ERP can keep all businesses properly protected. If you’re about to switch to a different occurrence policy, you also need to be protected with an ERP. This form of coverage helps to ensure that all of the work you did under your previous policy stays safe.
Keeping your business safe is your responsibility as a business owner. With the right ERP coverage, you can ensure that your company remains protected if you sell your business, close it down or switch policies.