Sunset Provision Law and Legal Definition

A sunset provision is a clause that provides that a provision of the law is automatically repealed on a specific date, unless legislators reenact the law. For instance, sunset provisions in tax cuts means that the tax-law provisions contained in the tax cut will expire or revert back to the original code unless extended by Congress.

In the context of insurance policies, a sunset provision sets a limit on the amount of time that a claimant has to submit or report a claim on a policy. It is important for the claimant to act within the defined period or else rights to make a claim are forfeited. For example, a sunset provision in an insurance policy may state as follows:

This policy will not provide any coverage, regardless of the other terms and conditions of the Policy, including the definition of "occurrence" for any claim or "suit" or demand for damages made against an insured unless the claim or "suit" or demand for damages is reported in writing to us within three (3) years after the Policy Period.