Investor's wiki

Bilateral Extended Reporting Period Provision

Bilateral Extended Reporting Period Provision

What is Bilateral Extended Reporting Period Provision

Bilateral Extended Reporting Period Provision is a reporting period extension gave to policyholders in claims-made liability insurance policies. These provisions apply to claims made after the retroactive date, and after the policy has been canceled, non-restored, or changed to an alternate type of liability policy.

Likewise called two-tail or two-way extended reporting provisions.

Understanding Bilateral Extended Reporting Period Provision

Businesses that purchase claims-made liability insurance may at last not keep on involving similar policy for a number of reasons. The policy might be canceled or not recharged; it could be replaced with an alternate type of liability policy, like an occurrence policy; or it very well might be replaced with a claims-made policy with an alternate retroactive date, which is more beneficial to the policyholder since it covers claims from a more drawn out period of time. These businesses, in any case, will need to ensure that they are covered from claims consistently.

Reporting Extension

A claims-made policy gives coverage when a claim is made against the policy, paying little heed to when the claim event occurred. A claims-made policy is probably going to be purchased when there is a deferral between when claims are recorded and when they happen. Business insurance policies are in many cases offered as either a claims-made policy or a occurrence policy. While the claims-made policy gives coverage to claims when the event is reported, the occurrence policy gives coverage when the event happens.

At times, the extended reporting period coverage isn't an option that can be added by the insured, and on second thought is an option that must be added by the insurer. The insurer will give coverage over an extended reporting period, assuming the insurer is the party that drops the policy or doesn't permit it to be restored. This is alluded to as a one-way tail. This contrasts from a bilateral extended reporting period provision, in that the insured doesn't have the option of purchasing the extension.

Bilateral extended reporting period coverage is normally given free-of-cost, in the event that the insurer is the party who chooses not to let the policy restore, drops the policy, or changes the type of liability policy. A supplemental or optional extended reporting period might be offered by the insurer at the request of the insured, and is probably going to cost the insured more in terms of premium to be paid.

The bilateral extended reporting period provision is added to the policy contract, and permits the policyholder to keep on reporting claims to the insurance company. The reporting period is ordinarily extended for a finite period of time, like 60 days.

Illustration of Bilateral Extended Reporting Provision

Vicky possesses a small business and the claims-made insurance policy for her business lapses on January 2, 2020. She neglects to reestablish her policy until a later date. In the interim, a claim is documented against her business on January 26, 2020.

The insurer has offered an extended reporting period of 60 days to her in the policy. This means that she can report claims documented against her business up to March 2, 2020. Since January 26 falls inside that period, the insurance company is responsible for respecting the claim.


  • The reporting period is generally extended for a finite period of time.
  • The coverage extension is generally offered free of cost when it is offered by the insurer, however costs more in premium when it is requested by the insured.
  • Bilateral extended reporting provision permits business owners to report claims after a claims-made policy has expired.