Common use of Optional Extended Reporting Period Clause in Contracts

Optional Extended Reporting Period. If the Named Insured cancels or non-renews this Policy or if the Insurer decides not to offer any renewal terms for this Policy, the Named Insured shall have the right to purchase, upon payment of an additional premium an extension of this Policy immediately following the end of the Policy Period, but only with respect to any Wrongful Act committed before the earlier of the end of the Policy Period or the effective date of any Takeover. The additional premium for such extension is a percentage of the total Policy Premium attributable to the Policy Year in effect upon such cancellation or non-renewal. For a one year extension, the premium equals seventy-five percent (75%) of such total Policy Premium; for a two year extension, the additional premium equals one hundred and twenty-five percent (125%) of such total Policy Premium; and for a three year extension, the additional premium equals one hundred and fifty percent (150%) of such total Policy Premium. This period shall be referred to as the Extended Reporting Period.