Which statement best describes tail coverage in relation to claims-made policies?

• A. It applies only to occurrence forms, not claims-made policies.
• B. It extends the reporting period for claims made after policy expiration when purchased.
• C. It increases the per-occurrence limit automatically.
• D. It has no application to CGL policies.

Answer: (B)

Tail coverage, or extended reporting period, is a feature for claims-made policies that lets you report claims after the policy has ended. When you purchase tail coverage, you extend the window during which a claim can be reported for incidents that occurred while the policy was in force, even though the claim is filed after expiration. This protection is crucial for situations like changing jobs or retiring, where a claim may surface after the policy term to which it would otherwise be too late to report. It doesn’t change the policy’s limits, and it’s not a concept that automatically applies to occurrence-based forms; it specifically relates to the reporting period for claims-made policies. That’s why the statement describing tail coverage as extending the reporting period for claims made after policy expiration when purchased is the best fit.