The Difference Between Claims Made and Occurrence Policies

September 21, 2016
By Cornerstone Staff

Understanding the wording that is used in your insurance policy can make a big difference for your business. Whether or not your policy covers you depends on this wording and the period of time that your policy covers.

An insurance policy can be written on two bases:

  1. Claims Made
  2. Claims Occurring

Claims Made policies provide coverage only when both the alleged incident and the claim happen while the policy is in force. If a claim is made after the policy is cancelled, claims that come in will not be covered. But as long as the insured continues to pay premiums for the initial policy and renewals, the policy provides coverage.

Claims Occurring policies protect you from any incident that occurs during the policy period, regardless of when the claim is actually filed. Even after the policy has been cancelled, claims that come in will be covered. This type of policy will offer you “permanent” coverage during that policy period.

So which one makes the most sense? Many factors come into play, including premiums. It’s important to understand what is most important to your area of business and specific company. However, Claims Made policies are becoming the most common type of policy.

Everyone involved should read all insurance policy documents carefully to ensure you truly understand the terms within them. It can make all the difference when it comes time to pay out.

Have questions about other insurance terms? Let us know how we can help!


Cornerstone Staff

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