Maximize Coverage Understanding Claims Made Vs Occurrence Policies

Claims-Made Policies: The Basics

Claims-made policies provide coverage for claims only if both the incident and the claim occur within the policy period. This means that the policy must be active when the claim is made, regardless of when the incident actually took place. One of the key benefits of claims-made policies is their flexibility in adjusting to changes in risk over time. This can be particularly advantageous for businesses in industries where liability risks evolve rapidly.

A notable feature of claims-made policies is the option to purchase "tail coverage," which extends the reporting period for claims after a policy has expired. This can be crucial for professionals such as doctors or architects, who may face claims long after services have been rendered. Tail coverage ensures that they remain protected even after retiring or switching insurers.