Claims Made Policy
What Does Claims Made Policy Mean?
A claims-made policy is a type of liability insurance that provides coverage only if a claim is filed during the policy period, regardless of when the event occurred. This differs from most other insurance policies, such as occurrence-based policies, which provide coverage as long as the insured event happens during the policy period, even if the claim is filed later.
Insuranceopedia Explains Claims Made Policy
Most insurance products provide coverage if the insured event occurs during the policy period. For example, a personal property policy will cover an item that was stolen or damaged during the policy period, even if the claim is filed after the policy has expired. The same applies to most general liability insurance for small businesses: incidents that happen during the coverage year are covered even if the claim comes in years later.
In contrast, claims-made policies pay out if a claim is filed during the policy period, regardless of when the event occurred. For instance, a claims-made professional liability policy will cover a medical malpractice claim filed during the policy period, even if the malpractice incident happened before the policy started. This structure is standard in professional liability insurance, and it’s one reason doctors and physicians insurance costs can jump when a practitioner switches carriers or retires, because the new policy won’t cover past incidents unless prior-acts or tail coverage is added.
