AD Banker Property and Casualty Practice Exam

The basic extended reporting provision (often referred to as "tail coverage") is designed to provide coverage for claims that may arise after a policy has expired but which are related to incidents that occurred during the policy period. The mini reporting period specifically refers to a short window of time immediately following the expiration of the policy during which the insured can report claims that arise.

In this context, a period of 60 days post-expiration serves as the mini reporting period. This duration allows the insured to file claims that occurred before the policy expiration, ensuring that there is a fair opportunity to address any late-arising claims without requiring immediate reporting at the moment the policy ends. Additionally, this provision becomes crucial in managing the risk associated with claims that may surface after a policyholder believes they are no longer active on a given policy.

The distinction of a 60-day timeframe aligns with industry norms, providing both the insured and the insurer a practical approach to managing claims. Other durations, such as 30 days or even longer periods like 90 days or one year, do not accurately represent the standard mini reporting period under the basic extended reporting provision. The correct understanding of this provision is essential for both insurers and policyholders to mitigate potential coverage gaps.