Extended Reporting Periods Explained

So, you’ve probably heard the term ‘extended reporting period’ thrown around when talking about insurance, especially if you’re in a business that might face claims long after a service was provided. It sounds a bit complicated, right? Basically, it’s a safety net. Think of it as extra time to report a claim after your main insurance policy has ended. This can be super important for certain types of coverage, and understanding it can save you a lot of headaches down the line. Let’s break down what this extended reporting period insurance really means.

Key Takeaways

An extended reporting period gives you extra time to report a claim after your policy expires, specifically for claims-made policies.
This is different from an occurrence policy, which covers events that happen during the policy period, no matter when they are reported.
Key triggers for needing an extended reporting period include policy termination, business sales, or mergers, to cover potential future claims.
It’s important to know the limitations, exclusions, and duration of any extended reporting period coverage offered, as it’s not always unlimited.
Understanding how extended reporting periods work is a key part of managing risk and ensuring you have continuous protection for your business.

Understanding Extended Reporting Periods in Insurance

Defining the Extended Reporting Period

An extended reporting period (ERP), sometimes called a tail coverage, is a specific endorsement or provision added to certain types of insurance policies, most commonly claims-made policies. It essentially provides a grace period after the policy has expired or been canceled. During this period, you can still report claims that occurred while the policy was active, even though the policy itself is no longer in force. Think of it as a safety net for those situations where a claim might surface long after the policy that covered the incident has ended. This is particularly important for professional liability or errors and omissions (E&O) insurance, where the consequences of an action might not become apparent for months or even years.

Key Triggers for Extended Reporting Periods

Several situations can lead to the application of an extended reporting period. The most common trigger is the termination or non-renewal of a claims-made policy. If you decide not to renew your policy, or if the insurer cancels it, an ERP can be activated. Another significant trigger is the sale or merger of a business. When a company is acquired or merges with another, the existing claims-made policies might be terminated. An ERP then becomes vital to cover any potential claims arising from the business operations prior to the sale or merger. It’s also sometimes triggered by the retirement or death of a professional, especially in fields like law or medicine, where past work could lead to future claims.

Distinguishing from Other Policy Clauses

It’s important not to confuse an extended reporting period with other policy clauses. For instance, an ‘occurrence’ policy covers incidents that happen during the policy period, regardless of when the claim is reported. This is fundamentally different from a ‘claims-made’ policy, which requires the claim to be reported while the policy is active or during an ERP. Another clause that might cause confusion is a ‘prior acts’ or ‘retroactive’ date. This date typically defines the earliest point in time for which an incident will be covered under a new claims-made policy. An ERP, however, specifically addresses the reporting window after a policy ends, not the inception date of coverage. Understanding these distinctions is key to proper insurance policy structures.

The core function of an ERP is to bridge the gap between the end of active policy coverage and the potential for claims to emerge. It acknowledges that in certain professions, the discovery of a loss or error can lag significantly behind the actual event that caused it, providing a necessary window for reporting such eventualities.

The Role of Reporting in Insurance Claims

When something goes wrong, letting your insurance company know promptly is a big deal. It’s not just a formality; it’s a key part of how insurance works. Think of it as the first step in a process designed to get things sorted out fairly and efficiently. The timely notification of a loss is often a condition within your policy, and failing to meet it can sometimes affect your coverage.

Insurer’s Need for Timely Claim Notification

Insurers need to know about a loss as soon as possible. This isn’t to make things difficult, but rather to allow them to do their job properly. When a claim is reported quickly, the insurer can start the investigation process without delay. This means they can:

Gather evidence while it’s still fresh.
Talk to witnesses before their memories fade.
Assess damage before it changes or worsens.
Identify potential fraud early on.

Delays in reporting can make it harder for the insurer to verify the details of the loss, which could potentially impact their ability to process the claim smoothly. It’s all about giving them a fair chance to investigate the circumstances. You can find more details about reporting requirements in your policy documents.

Impact of Reporting Delays on Investigation

Imagine trying to solve a mystery days or weeks after the event. Evidence might be gone, people might have forgotten key details, and the scene could be completely different. That’s what happens with delayed insurance claims. If you wait too long to report a loss, the insurer might face challenges:

Difficulty in verifying the cause of loss: Was it really a storm, or something else that happened later?
Increased severity of damage: A small leak can become a major water damage claim if not addressed promptly.
Challenges in assessing liability: Especially in liability claims, understanding who is responsible requires timely information.
Potential for coverage disputes: If the delay makes it impossible to confirm coverage details, it can lead to disagreements.

This is why understanding your policy’s reporting timelines is so important. It helps protect you by ensuring the insurer has the best possible information to work with.

Policy Provisions Governing Claim Reporting

Your insurance policy isn’t just a piece of paper; it’s a contract that outlines the rules for both you and the insurer. When it comes to reporting claims, there are specific clauses you should be aware of. These provisions typically detail:

Who to notify: Usually, it’s your insurance agent or the insurance company directly.
How to notify: This could be by phone, email, online portal, or written letter.
When to notify: Policies often specify a timeframe, such as ‘as soon as reasonably possible’ or a set number of days.
What information to provide: You’ll generally need to give details about the incident, the date and time it occurred, and the nature of the loss.

Paying attention to these details can prevent misunderstandings down the line. It’s also worth noting that insurers conduct policy audits to make sure these procedures are being followed correctly on both sides.

Navigating Claims-Made Policy Structures

Occurrence vs. Claims-Made Coverage Frameworks

When you’re looking at insurance, especially for things like professional liability or errors and omissions (E&O), you’ll run into two main ways policies are structured: occurrence-based and claims-made. It’s a pretty big deal because it changes when your coverage actually kicks in. An occurrence policy pays out if the incident that caused the harm happened during the policy period, no matter when the claim is filed. Think of it like this: if a faulty product was manufactured in 2020 while your policy was active, and someone gets hurt by it in 2025, the 2020 policy would likely cover it. It’s pretty straightforward in that sense. Understanding insurance policies involves looking at these core structures.

Claims-made policies, on the other hand, are a bit different. They only provide coverage if the claim is made against you and reported to the insurer during the policy period. So, even if the mistake happened years ago, if the claim isn’t filed and reported while your current claims-made policy is active, you might not have coverage. This is where extended reporting periods become so important, which we’ll get into more later. It’s a key distinction that can really impact your protection.

Temporal Boundaries in Claims-Made Policies

Claims-made policies have specific timeframes that matter a lot. There are usually two dates you need to pay attention to: the policy’s effective date and its expiration date. For coverage to apply, the claim must be made against you and reported to the insurer between these two dates. This is the core of how a claims-made policy works. It’s all about when the claim is reported, not necessarily when the underlying event occurred. This is a major difference from occurrence policies, where the event date is the primary trigger.

The Significance of Retroactive Dates

Now, here’s where it gets a little more complex, but it’s super important for claims-made policies: the retroactive date. This date, often found on the declarations page, essentially sets a cutoff for when the act or omission that led to the claim could have occurred. If the incident happened before your retroactive date, even if the claim is made during your policy period, the policy won’t cover it. Insurers use retroactive dates to avoid covering claims for events that happened long before they started providing coverage. This date is critical for understanding the full scope of your protection under a claims-made policy. Sometimes, policies will have a "full prior acts" provision, which means there is no retroactive date, and coverage applies to any claim made during the policy period, regardless of when the act occurred. This is a more robust form of coverage, but it usually comes at a higher premium. When you’re looking at policy structures, pay close attention to these dates.

When Extended Reporting Periods Apply

Extended reporting periods, often called ‘tail coverage,’ aren’t just a random add-on; they kick in under specific circumstances, usually when your primary insurance policy is ending or has ended. Think of it as a safety net for claims that might pop up later, even after the policy itself is no longer active. It’s particularly relevant for claims-made policies, which, unlike occurrence policies, only cover claims made during the policy term. This means if an incident happened while the policy was active but the claim isn’t filed until after it expires, you might be left unprotected without this extended coverage.

Policy Termination and Extended Reporting

When an insurance policy, especially one written on a claims-made basis, is terminated, canceled, or not renewed, an extended reporting period often becomes a critical consideration. This isn’t automatic for all policies, but it’s a common feature, particularly in professional liability or errors and omissions (E&O) insurance. The purpose is straightforward: to provide a defined window of time after the policy’s expiration date during which you can still report claims that arose from incidents that occurred during the policy’s active period. Without this, a gap in coverage could leave you exposed to significant financial risk. The length of this period is usually specified in the policy, often ranging from one to several years, and it’s important to understand that it typically doesn’t provide coverage for new incidents that happen after the original policy’s end date.

Circumstances Triggering Extended Reporting

Several events can trigger the applicability of an extended reporting period. The most common is simply the expiration or non-renewal of a claims-made policy. However, other situations can also lead to its activation:

Policy Cancellation: If the insurer cancels the policy, an ERP might be triggered, depending on the policy wording and state regulations.
Insured’s Death or Disability: In some professional liability policies, the death or permanent disability of the insured individual can trigger an ERP, allowing for claims to be reported against their estate or by their representatives.
Retirement: For certain professions, retirement can be a trigger, providing a period to report claims related to past professional activities.
Merger or Acquisition: If a business is sold or merges with another entity, the ERP can be crucial for covering claims related to the pre-transaction operations of the acquired business.

It’s vital to review your policy documents carefully to understand precisely what events activate the extended reporting period and what the specific terms are. The policy language will be the ultimate guide.

Impact of Business Sale or Merger

When a business that carries claims-made insurance is sold or merges with another company, the implications for extended reporting periods can be significant. Often, the sale or merger itself can act as a trigger for purchasing an ERP. This is because the acquiring entity might not want to assume the past liabilities of the sold business, or the seller may want to ensure ongoing protection for claims arising from their prior operations. Without an ERP, claims related to the business’s activities before the sale but reported after the sale closes could fall into a coverage gap. The ERP essentially extends the reporting window for the seller’s prior acts, protecting them from future claims that might surface once the business ownership has changed hands. It’s a key component of risk management during business transitions.

The decision to purchase an extended reporting period is a strategic one, often driven by the nature of the business, the type of insurance policy, and the potential for latent claims to emerge. It’s not a one-size-fits-all solution, and understanding the specific triggers and limitations within your policy is paramount to ensuring adequate protection.

Benefits of Extended Reporting Period Insurance

Extended reporting periods, often called tail coverage, offer a safety net for businesses that have transitioned away from a claims-made insurance policy. It’s not just about closing out old business; it’s about providing ongoing protection for potential future claims that might arise from incidents that happened while the policy was active but weren’t reported yet. This can be a real lifesaver, especially in fields where issues can surface long after the initial event.

Ensuring Coverage for Latent Claims

One of the primary advantages of an extended reporting period is its ability to cover latent claims. These are claims that stem from an event or circumstance that occurred during the original policy term but wasn’t discovered or reported until after the policy expired. Think about professional liability or environmental liability; issues can take years to manifest. Without an extended reporting period, a business could be left exposed to significant financial loss for something that happened on their watch but was reported too late.

Protection Against Undiscovered Errors: Covers mistakes or omissions made during the policy period that are only found later.
Environmental Latency: Addresses claims related to pollution or contamination that may not be apparent for extended periods.
Product Liability: Provides a buffer for claims arising from products manufactured or sold years prior.

Protecting Against Future Litigation

Even after a business ceases operations or changes its insurance structure, the possibility of litigation related to past activities remains. An extended reporting period acts as a shield, allowing former policyholders to defend themselves against lawsuits that arise from incidents that occurred during the original policy’s active dates. This is particularly important for businesses that have undergone mergers or acquisitions, as the new entity might still be liable for the prior business’s actions. This continuity of coverage helps maintain business continuity post-policy.

Maintaining Business Continuity Post-Policy

For businesses that are winding down, selling, or merging, securing an extended reporting period is a strategic move. It allows them to close one chapter with greater financial certainty, knowing that they won’t be blindsided by unexpected claims from past operations. This peace of mind is invaluable, enabling leadership to focus on future endeavors without the lingering threat of old liabilities. It’s a way to manage risk proactively, even when the primary business activity has ceased. The insurer’s need for timely claim notification is a key reason why these periods are structured as they are, to allow for proper investigation even after the policy has ended.

Securing an extended reporting period is a critical step in risk management for businesses transitioning out of claims-made policies. It bridges the gap between policy expiration and the potential discovery of past incidents, safeguarding against unforeseen financial liabilities and legal entanglements.

Limitations and Exclusions

Even with an Extended Reporting Period (ERP), it’s not a blank check for all future claims. Think of it as a specific, limited extension, not a full policy renewal. Understanding what’s not covered is just as important as knowing what is.

Scope of Coverage Under Extended Reporting

An ERP typically only covers claims that arise from incidents that happened during the original policy period but were reported late. It doesn’t extend coverage to new incidents that occur after the original policy’s expiration date. Essentially, the underlying event must have taken place while the main policy was active. This is a key distinction to remember when evaluating your needs. It’s about reporting delays, not about covering new risks that emerge later.

Specific Exclusions to Consider

Policies often have specific exclusions within the ERP itself. These can vary widely, but common ones include:

New Incidents: As mentioned, any event or occurrence that happens after the original policy’s termination date is not covered, even if reported during the ERP.
Known or Anticipated Claims: If you were aware of a potential claim or incident before the ERP began and didn’t report it, the ERP might not cover it.
Specific Types of Losses: Some policies might exclude certain types of claims that were already problematic or excluded under the original policy, even if the ERP is triggered.
Failure to Cooperate: If you don’t cooperate with the insurer’s investigation during the ERP, coverage could be jeopardized.

Duration and Renewal of Extended Reporting

ERPs are not typically renewable in the same way a standard policy is. They are usually offered for a fixed period, often ranging from one to five years, depending on the policy type and insurer. The cost is usually a percentage of the expiring premium, and this is a one-time charge. You can’t usually extend an ERP beyond its initial term. If you need coverage beyond the ERP, you’ll need to secure a new policy, potentially with a new retroactive date. It’s important to review the specific terms of your ERP to understand its exact duration and any conditions related to its activation. For more on policy terms, understanding policy clauses is vital.

It’s critical to remember that an ERP is a safety net for reporting past events, not a bridge to cover future ones. Always read the fine print to avoid surprises when a claim arises.

Cost and Pricing of Extended Reporting

Figuring out the cost of an extended reporting period (ERP) isn’t always straightforward. It’s not like buying a new policy off the shelf; it’s more of a tailored calculation based on several factors. Think of it as a specialized service, and the price reflects that.

Factors Influencing Extended Reporting Costs

The price tag for an ERP is usually tied to what the original policy cost. Insurers look at a few key things:

The premium of the expiring policy: This is often the biggest driver. A higher premium on the base policy usually means a higher cost for the ERP.
The type of coverage: Some types of insurance, like professional liability or directors and officers (D&O) insurance, tend to have higher ERP costs because the potential for claims can be significant and long-lasting.
The length of the ERP: Naturally, the longer you want the reporting period to be, the more it will cost. Standard periods are often 1, 3, or 5 years, but longer terms are sometimes negotiable.
The insurer’s claims experience: If the insurer has seen a lot of claims come in during ERPs for similar policies, they might price it higher to account for that historical data. This is part of how they price insurance.
The specific risks covered: Policies that cover highly volatile or complex risks might command a higher ERP premium.

Typical Pricing Structures

Most insurers don’t just pull a number out of thin air. They usually have a set structure for calculating ERP costs. Often, it’s a percentage of the expiring policy’s premium. For example, a 1-year ERP might cost 50-100% of the expiring premium, while a 3-year ERP could be 150-250%. These are just general ranges, and the actual percentage can vary quite a bit.

Here’s a rough idea of what you might see:

ERP Duration	Typical Cost as % of Expiring Premium
1 Year	50% – 100%
3 Years	150% – 250%
5 Years	200% – 350%

It’s important to remember that these are just guidelines. The insurer’s specific rate filings and their internal pricing models will dictate the final cost.

Negotiating Extended Reporting Terms

While insurers have their standard pricing, there can be room for negotiation, especially for long-term clients or when purchasing ERPs for multiple policies. Don’t be afraid to discuss the terms.

Bundling policies: If you’re buying ERPs for several different policies from the same insurer, you might be able to get a better overall price.
Longer terms: Sometimes, committing to a longer ERP term can result in a lower annual cost compared to purchasing shorter terms consecutively.
Specific endorsements: If you can clearly define the reduced risk or specific circumstances, you might be able to negotiate a slightly lower rate.

The cost of an extended reporting period is a significant consideration when a claims-made policy is ending. It’s an investment in future coverage for events that may have occurred but haven’t yet been reported. Understanding the factors that influence this cost is key to making an informed decision about protecting your business or practice.

Regulatory Considerations for Reporting Periods

When we talk about extended reporting periods, it’s not just about what your insurance policy says. There are rules and regulations that play a part, mostly at the state level. These rules are there to make sure things are fair for everyone involved and that insurance companies stay financially sound. Think of it as a set of guidelines that insurers have to follow when they design policies and handle claims, including how they deal with reporting periods.

State-Specific Regulations on Reporting

Each state has its own Department of Insurance, and these agencies are the main overseers. They set the standards for policy language, making sure it’s clear and doesn’t trick people. This includes how reporting periods, both standard and extended, are defined and what conditions might trigger them. Some states might have specific requirements about how long an extended reporting period must be offered or under what circumstances it can be denied. It’s a complex landscape because what’s allowed in one state might not be in another. This is why understanding the specific rules where you operate or where your policy was issued is so important. You can often find information on your state’s Department of Insurance website, which is a good place to start if you have questions about policy form filings.

Compliance Requirements for Insurers

Insurers have a lot of hoops to jump through to stay compliant. They have to submit their policy forms, including any clauses about extended reporting, to regulators for review. This is to check if the wording is fair and follows the law. Beyond just the policy wording, regulators also look at how insurers manage their money (solvency) and how they treat customers (market conduct). For extended reporting periods, this means insurers need to have clear internal processes for when and how these are offered, and they need to be able to prove they are following their own stated procedures and state laws. Failing to comply can lead to fines or other penalties, which is why insurers invest a lot in making sure their operations meet these standards.

Consumer Protection Aspects

At the heart of these regulations is consumer protection. The rules around reporting periods, especially extended ones, are designed to prevent situations where a policyholder might unknowingly lose coverage for a claim that occurred during the policy period but was reported late. For instance, if a business closes down, regulations might mandate that the insurer still offers an extended reporting period to cover potential future claims arising from past operations. This protects businesses that might not be aware of latent claims surfacing after their insurance has technically ended. It’s all about ensuring that policyholders aren’t left unprotected due to technicalities, especially when dealing with claims that can take a long time to emerge. This focus on fairness helps maintain trust in the insurance system, ensuring that businesses can operate with a reasonable degree of certainty about their coverage for potential losses.

Integrating Extended Reporting into Risk Management

Thinking about extended reporting periods isn’t just about what happens when a policy ends; it’s a proactive step in your overall risk management strategy. It’s about making sure that even after you’ve moved on from a particular insurance policy, you’re still covered for potential issues that might pop up later. This is especially true for policies like professional liability or errors and omissions, where a mistake made today might not lead to a claim for months or even years.

Strategic Importance for Businesses

For any business, especially those in service industries or professions where mistakes can have long-term consequences, integrating extended reporting into your risk management plan is smart. It’s not an afterthought; it should be part of your initial policy selection and renewal process. This coverage acts as a safety net, protecting your business from claims that arise from past work but are reported after your current policy has expired. Think of it as a way to maintain continuity in your protection, regardless of policy changes or business transitions. It helps prevent unexpected financial burdens that could arise from latent claims, safeguarding your company’s financial health and reputation. Understanding how these periods work is key to making informed decisions about your insurance coverage.

Aligning Reporting Periods with Business Cycles

When you’re planning your insurance, consider your business’s typical lifecycle and the nature of your work. If your business undergoes significant changes, like mergers, acquisitions, or even just a shift in the types of services you offer, it’s important to review your reporting period needs. For instance, if you’re selling your business, you’ll want to ensure that any claims arising from your operations prior to the sale are still reportable. This might involve purchasing a specific extended reporting period endorsement or ensuring the sale agreement addresses this. It’s about anticipating future liabilities and making sure your insurance strategy accounts for them, even during periods of significant business transition. Analyzing claims data can also help identify trends and potential future risks, allowing for better alignment of coverage over time.

Communicating Reporting Obligations Internally

It’s not enough to just buy an extended reporting period; your team needs to know about it. Make sure that relevant personnel, particularly those in legal, finance, and operations, understand what an extended reporting period is, when it applies, and what steps need to be taken if a potential claim arises during that period. Clear internal communication prevents confusion and ensures that claims are reported correctly and within the specified timeframe, which is vital for the coverage to be effective. This internal awareness is a critical part of your overall risk management framework, ensuring that the protection you’ve purchased actually works when you need it.

Evaluating Insurer Offerings for Extended Reporting

When you’re looking at insurance policies, especially those with extended reporting periods, it’s easy to get lost in the details. Different companies present their policies in unique ways, and what seems like a good deal on the surface might have hidden complexities. It’s really important to compare what each insurer is actually offering, not just the price tag.

Assessing Policy Wording and Clarity

First off, you’ve got to read the fine print. Insurance policies are legal documents, and the language used can be pretty dense. Look for clear definitions of what triggers an extended reporting period and what exactly is covered during that time. Are there specific events that must happen for it to kick in, or is it automatic upon policy termination? Understanding the exact conditions under which the extended reporting period applies is paramount. Sometimes, policies might use vague terms that could lead to disputes later on. It’s about making sure you know what you’re buying.

Comparing Different Insurer Provisions

No two policies are exactly alike, even for the same type of coverage. You’ll want to create a comparison chart to see how different insurers handle extended reporting periods. Consider these points:

Duration: How long does the extended reporting period last? Some might offer a standard period, while others allow for negotiation.
Scope of Coverage: Does it cover all claims reported during the period, or are there limitations based on the type of claim or the circumstances of the policy’s end?
Cost: What is the premium for the extended reporting period? Is it a flat fee, a percentage of the original premium, or something else?
Exclusions: Are there specific types of claims or situations that are not covered during the extended period?

Here’s a quick look at how durations might vary:

Policy Type	Standard ERP Duration	Negotiable ERP Duration
Professional Liability	1-3 years	Up to 5 years
Directors & Officers	3-6 years	Up to 10 years
Pollution Liability	1-2 years	Varies significantly

The Role of Insurance Brokers and Agents

Trying to sort through all this on your own can be overwhelming. This is where a good insurance broker or agent really earns their keep. They understand the nuances of different policies and can help you identify coverage gaps. They have experience with various insurers and know which ones are generally more straightforward or have better reputations for handling claims during these extended periods. Don’t hesitate to ask them to explain anything you don’t understand. They are there to help you make an informed decision and advocate for your best interests in the insurance market.

Wrapping Up Extended Reporting Periods

So, we’ve looked at what extended reporting periods are and why they matter. It’s pretty clear that these periods aren’t just some random detail; they’re a key part of how insurance policies work, especially when it comes to making sure claims get handled right and that everyone’s on the same page. Understanding these timelines helps policyholders know what to expect and what their responsibilities are, which can really smooth things out if something unexpected happens. It’s all about making sure the system works as intended, protecting both the people with insurance and the companies providing it.

Frequently Asked Questions

What exactly is an Extended Reporting Period (ERP)?

Think of an ERP as a safety net. It’s a special time added after your insurance policy ends, giving you a chance to report claims that happened *during* the old policy period but weren’t reported yet. It’s like a grace period for reporting.

Why would I need an ERP?

Some types of insurance, especially those for professional mistakes (like errors and omissions insurance), cover claims that might pop up long after the actual mistake was made. An ERP ensures you’re still covered for those past events even if your policy has expired.

How is an ERP different from just renewing my policy?

Renewing your policy starts a *new* coverage period for future events. An ERP is specifically for reporting claims related to events that occurred *before* the policy ended or was canceled. They serve different purposes.

When does an ERP usually kick in?

An ERP typically becomes active when a claims-made policy is canceled, not renewed, or if the insurer decides not to offer renewal. It’s a way to handle claims that might surface later for incidents that happened while the policy was active.

Does an ERP cost extra?

Yes, usually. Insurers often charge a fee for an ERP, which is typically a percentage of the policy’s premium. This fee covers the insurer’s potential exposure to claims that might be reported during that extended time.

How long does an ERP last?

The length of an ERP can vary. Common periods are one, three, or even five years, but it really depends on the specific insurance policy and what the insurer offers. Sometimes, you can even buy longer periods.

What if my business is sold or merges with another company?

When a business is sold or merges, especially if it’s a claims-made policy, an ERP becomes very important. It helps ensure that claims related to the business’s past operations are still covered, even under new ownership.

Are there any limits to what an ERP covers?

Absolutely. An ERP generally only covers claims for incidents that happened *before* the original policy ended and *before* the ERP started. It doesn’t cover new incidents that occur during the ERP itself. Also, specific policy exclusions still apply.