Difference Between Claims-Made And Occurrence Policies?

​A claim under an event policy can be made at any time for losses during the policy's coverage period. Unless a "tail" extension is purchased, claims-made insurance only covers incidents that occur and are reported within the policy's time frame.

Insurance companies may provide two types of liability coverage: occurrence policy and claims-made policy. Two variables mostly determine the limits that come with various insurance plans:

• At the time of an occurrence
• The time of claim submission

What is the Occurrence Policy?
Regardless of when a claim is made, an occurrence policy will protect the company from any incident within the policy period and is listed as a covered event. When a claim is filed after the policy has been terminated, the insurer will still pay out as long as the occurrence occurred within the policy's time limit. Because coverage lasts longer, this insurance can be more expensive.

Do You Need a Tail Coverage Policy If You Have an Occurrence Policy? 
If you already have an occurrence policy, tail coverage is unnecessary. Because even if you report a claim after your policy has expired, you will still be covered if the occurrence in question occurred during the policy period. Therefore, there is no requirement for tail protection.

What is the Claims-Made Policy?
A claims-made policy offers coverage for claims that arise and are reported within the policy's specified time frame. To put it another way, if a policy is terminated or a premium isn't paid, the insurer has no obligation to pay out any claims that may have arisen during the policy's active time.

Take-Aways
Claims-made and occurrence policies offer protection against financial loss, but it's up to you to decide which is most appropriate for your business. What may be effective for one company may not be optimal for another.

At Robinsons Insurance Agency, we do our best in making sure that our clients are well-protected with affordable and comprehensive policies. We make sure to go the extra mile to help you with your needs. To learn more about how we can help you, please contact our agency at (888) 254-7350 or Click Here to request a free quote. Topics and coverage discussed in this article are not guaranteed, consult with your agents to determine what your policy does and does not cover. We are more than happy to help!