Insurance jargon can be confusing and result in many buyers purchasing coverage that might not truly reflect what they are intending to insure. Today we are going to discuss the differences between and "Occurrence" and "Claims Made" policy.
Occurrence: Most general liability insurance polices are written on an "occurrence" basis. This means an insurance policy needs to be effective on the date an incident occurred in order for coverage to be in effect. This means a claim can be paid even if a policy has expired, as long as the incident occurred while the insurance policy is in force. Depending on the jurisdiction and policy, various subjectivity and statutory conditions may apply.
Claims Made: Claims made policies provide coverage from the date the claim is made against the insured and usually provide an extended reporting period beyond the expiration date of the policy. Most common in professional liability policies, claims made policies require retroactive dates in order to cover events that occurred in previous years.
Both types of policies should be able to provide the coverage need if they are structured properly. It Is important to as your insurance broker how Occurrence vs Claims Made insurance applies to you.
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The Base Team
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