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Long Tail Liability

A term used to describe certain type of third party liability exposures (e.g., malpractice, products, error and omissions) where the incidence of loss and the determination of damage are frequently subject to delays which extend beyond the term the insurance or reinsurance was in force. An example would be contamination of a food product which occurs when the material is packed but which is not discovered until the product is consumed months or years later.

Long Term Agreement

An agreement by the insured to renew a policy on the original terms for a given term of years, e.g. three, in return for a premium discount. LTAS are separate contracts and if the insurer offers amended cover, the insured can avoid renewals. LTAs are most common in commercial insurance.
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A mutual agreement whereby in return for agreeing to continue the Insurance for a fixed number of years, the insured is allowed a discount on each annual premium. The Insurer normally retains the right to vary the terms of Insurance during the period but period but is exercised the insured may cancel the agreement without forfeiture of earlier discounts.

Long term business

the classes of insurance business set out in Part II of Schedule 1 to the Regulated Activities Order and characterised by the long term nature of the contracts; for the most part this business comprises various types of life insurance, annuity and pension business, together with capital redemption business and permanent health insurance.