What is Discovery Period | Insurance glossary by upcover

What is Discovery Period?

Also known as: additional benefit, optional extension, extended cover
Found in: public liability, professional indemnity, business pack, management liability, cyber
Section: Extensions or Additional benefits; shown as applying on the schedule

What an extension of cover means in your insurance policy

Extensions sit in their own section of the policy wording, usually headed Extensions or Additional benefits. The schedule shows which ones apply to your policy. Some are automatic; others are optional and cost extra. They may widen what is covered, such as regulatory investigation costs under professional indemnity, or who is covered, such as subsidiaries or former employees.

They may also widen where cover applies, such as worldwide territorial limits, or when, such as a discovery period. Each extension generally carries its own sub-limit, which is lower than the main limit, and may have conditions or exclusions of its own.

Why it matters for your business

Extensions are where a policy either fits your business or quietly doesn't. A tradie who hires equipment relies on a hired-in plant extension; a consultant who travels relies on the territorial extension. Businesses commonly check the extensions list against how they actually work. Whether an extension is automatic or optional varies between policy wordings, so always check with your broker or the team at upcover. A common mistake is reading the main limit of liability as the limit for every extension, when most extensions carry a much lower sub-limit.

Hypothetical example: An electrical contractor in Townsville hires a scissor lift for a two-week commercial job. It is damaged when a wall collapses. His business pack policy includes a hired-in plant extension with a $25,000 sub-limit. The hire company claims $18,000. The extension may respond to the hire company's claim, up to the sub-limit and subject to the policy terms. Without the extension, the claim may have fallen outside the cover.

_Important:_{Claims scenarios are hypothetical examples only. Cover is always subject to policy terms, conditions and exclusions. Policy wordings may also vary between insurers. Always refer to the policy wording and its terms and conditions for details.}

Related Terms

Sum Insured (Strata)

Market Value Cover (Strata)

Replacement Cost Cover (Strata)

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What is Discovery Period?

Also known as: additional benefit, optional extension, extended cover
Found in: public liability, professional indemnity, business pack, management liability, cyber
Section: Extensions or Additional benefits; shown as applying on the schedule

What an extension of cover means in your insurance policy

Why it matters for your business

Related Term

Sum Insured (Strata)

Market Value Cover (Strata)

Replacement Cost Cover (Strata)

All Category

Financial

Legal

Insurance Documents

Fundraising

Employment

Policy

Risk Management

E&O

D&O

Commercial Insurance

Cyber

Compliance

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