Primary Extended Reporting Period

Oct 13, 2025 by thesweetdesigns.com 97 views

Understanding Commercial General Liability Policies: Claims-Made Basis Reporting Periods

As a business owner, it's essential to understand the intricacies of Commercial General Liability (CGL) policies, particularly those written on a claims-made basis. One critical aspect of these policies is the reporting period, which can significantly impact your business's liability exposure. In this article, we'll delve into the types of reporting periods provided automatically for CGL policies written on a claims-made basis.

What is a Claims-Made Basis Policy?

A claims-made basis policy is a type of liability insurance policy that covers claims made against the policyholder during the policy period, regardless of when the incident occurred. This means that if a claim is made against your business during the policy period, the insurance company will cover the costs, even if the incident happened before the policy was purchased.

Types of Extended Reporting Periods

When a CGL policy is written on a claims-made basis, the policyholder is typically provided with an extended reporting period (ERP) to report claims that may have occurred before the policy was purchased. There are three types of ERPs: Primary Extended Reporting Period, Basic Extended Reporting Period, and Broad Extended Reporting Period.

Primary Extended Reporting Period

The Primary Extended Reporting Period is the most basic type of ERP. It provides a limited reporting period, usually 30 to 60 days, during which the policyholder can report claims that may have occurred before the policy was purchased. This type of ERP is typically provided automatically with the policy and is designed to give the policyholder a brief window to report any claims that may have been missed.

Basic Extended Reporting Period

The Basic Extended Reporting Period is a more comprehensive type of ERP than the Primary Extended Reporting Period. It provides a longer reporting period, usually 1 to 2 years, during which the policyholder can report claims that may have occurred before the policy was purchased. This type of ERP is also provided automatically with the policy and is designed to give the policyholder more time to report any claims that may have been missed.

Broad Extended Reporting Period

The Broad Extended Reporting Period is the most comprehensive type of ERP. It provides an extended reporting period, usually 5 to 10 years, during which the policyholder can report claims that may have occurred before the policy was purchased. This type of ERP is not provided automatically with the policy and must be purchased separately.

Which Type of Reporting Period is Provided Automatically?

Based on the information above, the Basic Extended Reporting Period is provided automatically with CGL policies written on a claims-made basis. This type of ERP provides a longer reporting period than the Primary Extended Reporting Period and is designed to give the policyholder more time to report any claims that may have been missed.

Conclusion

In conclusion, understanding the types of reporting periods provided automatically for CGL policies written on a claims-made basis is crucial for business owners. The Basic Extended Reporting Period is the type of ERP that is provided automatically with these policies, providing a longer reporting period than the Primary Extended Reporting Period. By knowing which type of ERP is provided automatically, business owners can better manage their liability exposure and ensure that they are protected in the event of a claim.

Recommendations

Always review your CGL policy carefully to understand the types of reporting periods provided.
Consider purchasing a Broad Extended Reporting Period if you need more time to report claims that may have occurred before the policy was purchased.
Consult with your insurance broker or agent to determine the best type of ERP for your business.

Frequently Asked Questions

Q: What is a claims-made basis policy? A: A claims-made basis policy is a type of liability insurance policy that covers claims made against the policyholder during the policy period, regardless of when the incident occurred.
Q: What is an extended reporting period (ERP)? A: An ERP is a type of reporting period that allows the policyholder to report claims that may have occurred before the policy was purchased.
Q: Which type of ERP is provided automatically with CGL policies written on a claims-made basis? A: The Basic Extended Reporting Period is provided automatically with CGL policies written on a claims-made basis.

Additional Resources

National Association of Insurance Commissioners (NAIC)
Insurance Information Institute (III)
American Insurance Association (AIA)

Note: The information provided in this article is for general informational purposes only and should not be considered as professional advice. It's always best to consult with a licensed insurance professional or attorney for specific guidance on your CGL policy.
Frequently Asked Questions: Commercial General Liability Policies Written on a Claims-Made Basis

As a business owner, it's essential to understand the intricacies of Commercial General Liability (CGL) policies, particularly those written on a claims-made basis. In this article, we'll address some of the most frequently asked questions about CGL policies written on a claims-made basis.

Q: What is a claims-made basis policy?

A: A claims-made basis policy is a type of liability insurance policy that covers claims made against the policyholder during the policy period, regardless of when the incident occurred.

Q: What is an extended reporting period (ERP)?

A: An ERP is a type of reporting period that allows the policyholder to report claims that may have occurred before the policy was purchased.

Q: Which type of ERP is provided automatically with CGL policies written on a claims-made basis?

A: The Basic Extended Reporting Period is provided automatically with CGL policies written on a claims-made basis.

Q: What is the difference between a primary extended reporting period and a basic extended reporting period?

A: The primary extended reporting period provides a limited reporting period, usually 30 to 60 days, during which the policyholder can report claims that may have occurred before the policy was purchased. The basic extended reporting period provides a longer reporting period, usually 1 to 2 years, during which the policyholder can report claims that may have occurred before the policy was purchased.

Q: Can I purchase a broad extended reporting period if I need more time to report claims?

A: Yes, you can purchase a broad extended reporting period if you need more time to report claims. This type of ERP provides an extended reporting period, usually 5 to 10 years, during which the policyholder can report claims that may have occurred before the policy was purchased.

Q: How do I know which type of ERP is right for my business?

A: You should consult with your insurance broker or agent to determine the best type of ERP for your business. They can help you understand the different types of ERPs and recommend the one that best fits your business needs.

Q: Can I cancel my CGL policy and still report claims that may have occurred before the policy was purchased?

A: No, you cannot cancel your CGL policy and still report claims that may have occurred before the policy was purchased. If you cancel your policy, you will no longer be able to report claims that may have occurred before the policy was purchased.

Q: What happens if I fail to report a claim that may have occurred before the policy was purchased?

A: If you fail to report a claim that may have occurred before the policy was purchased, you may be liable for the costs of the claim. It's essential to report all claims that may have occurred before the policy was purchased to avoid any potential liability.

Q: Can I purchase a CGL policy that covers claims made against my business during the policy period, regardless of when the incident occurred?

A: Yes, you can purchase a CGL policy that covers claims made against your business during the policy period, regardless of when the incident occurred. This type of policy is known as a "claims-made" policy.

Q: What is the difference between a claims-made policy and a claims-made-and-reported policy?

A: A claims-made policy covers claims made against the policyholder during the policy period, regardless of when the incident occurred. A claims-made-and-reported policy requires the policyholder to report claims that may have occurred before the policy was purchased during the policy period.

Q: Can I purchase a CGL policy that covers claims made against my business during the policy period, regardless of when the incident occurred, and also provides an extended reporting period?

A: Yes, you can purchase a CGL policy that covers claims made against your business during the policy period, regardless of when the incident occurred, and also provides an extended reporting period. This type of policy is known as a "claims-made" policy with an extended reporting period.

Conclusion

In conclusion, understanding the intricacies of CGL policies written on a claims-made basis is crucial for business owners. By knowing the answers to these frequently asked questions, you can better manage your liability exposure and ensure that you are protected in the event of a claim.

Recommendations

Always review your CGL policy carefully to understand the types of reporting periods provided.
Consider purchasing a broad extended reporting period if you need more time to report claims that may have occurred before the policy was purchased.
Consult with your insurance broker or agent to determine the best type of ERP for your business.

Additional Resources

National Association of Insurance Commissioners (NAIC)
Insurance Information Institute (III)
American Insurance Association (AIA)