Maximize Coverage Understanding Claims Made Vs Occurrence Policies

Financial Implications and Cost Considerations

When choosing between claims-made and occurrence policies, it's essential to consider the financial implications of each. Claims-made policies typically start with lower premiums that increase over time as the risk of claims grows. This can be beneficial for new businesses looking to manage initial costs. However, the added expense of tail coverage should be factored into long-term financial planning.

Occurrence policies, while generally more expensive upfront, provide a consistent and predictable cost structure. This can be advantageous for businesses with stable operations and a clear understanding of their long-term liability risks. It's important to evaluate your specific needs and financial capabilities when deciding which policy type is best suited for you.