Discovery period
Category: Claims and policy principles · Reviewed by the Apex broking team · Last reviewed 2026-08-22 · ~6 min read
Category: Claims and policy principles
Also known as: extended reporting period, ERP, tail cover, discovery clause
Related concepts: date of discovery, trigger clause, run-off cover
What it does, precisely
Claims-made cover responds to claims first made against the insured and notified during the policy period. That structure leaves an obvious gap at expiry: an act done during the policy year may not produce a claim until months or years later, by which time the policy has gone. A discovery period closes part of that gap by allowing notification after expiry.
The essential mechanics are the same across wordings. The wrongful act, error or omission must have taken place before the policy expired, and after any retroactive date. The claim or circumstance must be notified within the discovery period. Cover then responds under the expired policy, using the expired policy’s limit and terms — not a fresh limit.
That last point is regularly misunderstood. A discovery period does not reinstate the limit. Claims notified during it erode whatever aggregate remains on the expired policy, and share it with claims already notified during the policy year itself.
Automatic, optional and purchased tails
Wordings handle the discovery period in three ways. Some give a short automatic period at no extra cost. Some offer an optional extension exercisable within a stated window after expiry, on payment of an additional premium expressed as a percentage of the expiring premium. Some offer nothing at all unless it is negotiated.
Where the extension is optional, the conditions on exercising it matter as much as the length. Common ones are that the option must be exercised within a short period after expiry, often thirty days; that all premium due must have been paid; and that the extension is unavailable where the policy was cancelled for non-payment or avoided. Some wordings also make the option unavailable if the policy is being replaced by equivalent cover elsewhere, which is the point of it.
The option is normally not available if the insurer, rather than the insured, declines to renew for certain reasons, or is available on different terms in that case. Reading the discovery clause before the renewal decision is made — not after — is the only way that option is preserved.
Discovery period versus run-off cover
The two are related and often conflated. Run-off cover is a policy: an annually renewable claims-made contract bought by a business that has ceased trading, sold its practice or stopped doing the insured activity, covering claims made and notified during each run-off year in respect of past work. It has its own limit each year and can be maintained for as long as it is needed and available.
A discovery period is a clause: a fixed extension of the reporting window on an expiring policy, sharing that policy’s limit and ending on a fixed date. It is a bridge, not a substitute.
For a business that has genuinely stopped, run-off cover is normally the right answer, because construction, professional and financial claims regularly surface well beyond any discovery period a wording will offer. A discovery period is the right answer for a shorter, defined gap — a change of insurer where continuity is imperfect, a wind-down with a known end date, a transaction where the buyer takes over cover from a fixed date.
How it interacts with date of discovery and trigger
Three related ideas often get blurred together. The trigger clause determines what event brings the policy into play — a claim being made, a circumstance being notified, damage occurring, a loss being sustained. The date of discovery determines when the insured is treated as having found out about a loss, which is what matters on discovery-based covers such as crime and fidelity policies. The discovery period determines how long after expiry a notification will still be accepted.
They can all be in play at once. On a crime policy, the date of discovery decides which policy year responds; a discovery period then decides whether a notification made after that policy has expired is still in time. Reading only one of the three, and assuming it answers the others, is a common error.
Practical points at renewal and at change of insurer
Continuity is the objective. The cleanest position is an unbroken chain of claims-made policies with a consistent retroactive date, so that no discovery period is ever needed. Where the chain is about to break — a change of insurer with a later retroactive date, a decision not to renew, a merger — the discovery clause is what stands between past work and no cover.
Four checks are worth making before the decision is taken. What length of discovery period does the expiring wording offer, automatically and optionally? What is the additional premium and by when must the option be exercised? Does the incoming policy give full retroactive cover for past work, which would make the tail unnecessary? And does the remaining aggregate on the expiring policy actually leave anything worth extending?
Where the answers are unfavourable, the alternative is usually to negotiate the incoming policy’s retroactive date rather than to buy a tail on the outgoing one.
Why it matters
A discovery period is one of the few provisions in a claims-made policy that can only be used at a specific moment and is lost permanently if that moment passes. Most of a wording can be revisited at the next renewal. This one cannot. That makes it worth understanding before the expiry date, not after a claim arrives in the post.
Frequently asked questions
What is a discovery period on a claims-made policy?
A defined period after the policy expires during which the insured may still notify claims or circumstances, provided the underlying act or omission occurred before expiry and after any retroactive date. It extends the reporting window only, and the claim is dealt with under the expired policy's limit and terms.
Does a discovery period give me a new limit of indemnity?
No. Claims notified during a discovery period erode whatever aggregate remains on the expired policy and share it with claims already notified during the policy year. If the aggregate is largely exhausted, the extension may be worth very little in practice.
Is a discovery period the same as run-off cover?
No. Run-off cover is a separate annually renewable policy for a business that has stopped trading or ceased the insured activity, with its own limit each year. A discovery period is a clause in an expiring policy that extends the notification window for a fixed time, sharing that policy's limit.
When do I have to decide whether to buy the tail?
Usually within a short window after expiry, often thirty days, and normally subject to all premium having been paid and the policy not having been cancelled for non-payment. Because the option is lost permanently once the window closes, the discovery clause should be read before the renewal decision, not after.
Related entries
This entry is part of the Apex Insurance Wiki. This entry is insurance information, not legal advice. It describes UK insurance law and market practice as at August 2026 and does not address the terms of any particular policy. Take advice on your own wording and your own facts before acting. Last reviewed 2026-08-22. Next review: 2027-02-22.
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This page is general information, not advice on a specific policy.