Discovery period.
Discovery period. A discovery period of no less than one year after the termination or cancellation of the bond is required. Any standard form written on a discovery basis, i.e., providing that a loss must be discovered within the bond period as a prerequisite to recovery of such loss, however, will not be required to have a discovery period if it contains a provision giving the insured the right to purchase a discovery period of one year in the event of termination or cancellation and the insured has already given the surety notice that it desires such discovery period.
A discovery period of no less than one year after the termination or cancellation of the bond is required. Any standard form written on a discovery basis,i.e., providing that a loss must be discovered within the bond period as a prerequisite to recovery of such loss, however, will not be required to have a discovery period if it contains a provision giving the insured the right to purchase a discovery period of one year in the event of termination or cancellation and the insured has already given the surety notice that it desires such discovery period.