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Understanding Tail Coverage Insurance

If you own your own business and want to keep your company covered through an insurance policy, you are going to want to keep reading. Tail coverage is essentially an extension of the timeframe during which you can submit claims to your insurance company after the policy has officially ended.

How Does Tail Coverage Work

Tail coverage, or an extended reporting period, works by giving the insured an additional amount of time to report losses that occurred during the period they were covered by the insurance policy. It does not allow you to make claims for losses that occurred after the policy expired.

Why Purchase an Extended Reporting Period

Companies that are going out of business or selling off portions of their business should strongly consider purchasing an extended reporting period. In the event that your company is sued after your insurance policy ended, you could still be covered by insurance if you purchased an extended reporting period.

How Long To Extend Your Policy

Many insurance companies offer several options for timeframes of extended reporting periods. It can be wise to purchase the longest timeframe so that you are covered if you need to make a claim for as long as possible.

Insurance agents can provide more information on extended reporting periods to meet your business needs.