Canadian Accredited Insurance Broker (CAIB) Three Practice Exam

What endorsement can be attached to a policy to cover claims reported after the policy expiration?

1. Liability Endorsement

2. Coverage Extension Endorsement

3. Extended Reporting Period Endorsement

4. Claims Made Endorsement

The correct answer is: Extended Reporting Period Endorsement

The Extended Reporting Period Endorsement is designed to provide coverage for claims that are reported after a policy has expired. This is particularly beneficial for claims-made policies, where coverage is contingent upon the policy being in force both when the incident occurs and when the claim is made. By attaching this endorsement, the insured gains additional time to report any potential claims that might arise from incidents occurring during the policy period, thereby ensuring continuity of coverage. This endorsement is particularly relevant in fields where claims may take time to surface after an event, such as professional liability insurance. By adding this endorsement, insurance providers reassure clients that they won't face a gap in coverage after the policy expires, as long as the claims relate to events that took place while the policy was active. This allows insured parties to manage their risk more effectively and can provide peace of mind when facing the uncertainty of future claims. In contrast, the liability endorsement typically modifies existing liability coverage without necessarily addressing the timing of claims. The coverage extension endorsement often refers to broadening the existing coverages rather than adjusting reporting requirements after expiration. Claims made endorsements themselves do not extend the reporting period but specify that coverage applies only to claims made during the active policy period.