Most Policies Expire at the Witching Hour

The majority of professional liability insurance policies tend to include the following phrase after the Policy Period end date is listed on the Declarations Page:

12:01 a.m. standard time at the address of the Named Insured.

Now sometimes the Dec page might indicate “local” time instead of standard time but there is an amazing consistency in choosing 12:01 a.m. as the end time. If your client’s policy expires on January 1 at 12:01 a.m., the policy does indeed expire well before daybreak on January 1, not at the end of the business day. While in the absence of a claim or incident, there may be some level of goodwill and flexibility on the underwriter’s part to extend the policy a skosh, perhaps to the end of the business day, the extension is by no means mandatory and should not be assumed.

All this makes me wonder why? Why 12:01 a.m. when 5:00 p.m. seems much more friendly. My research did not yield any strong clarification but this typical contract language certainly extends to other areas outside of insurance and may have originated in English common law. And of course a 5:00 p.m. end time could mean the policy would no longer be precisely one year. At this time, we just may not be ready to make this much of a departure from tradition.