Claims-made vs Occurrence

If you know anything about insurance, you’ve probably found out that there are two forms of insurance available to you. They include occurrence and claims-made. While they’re pretty much identical, there is one main difference. The major difference is the way in which the coverage will be activated. How are these policies different? Which one should you choose for your business? You’ll find out in the guide below.


Occurrence Policies

First and foremost, you should learn about the occurrence type of insurance. This specific type of business insurance coverage is designed to protect your business during a specific period. It doesn’t matter when the incident was actually reported. Just say that you’ve acquired an occurrence insurance policy. The policy was activated on January 1, 2018 and it will remain activate until the end of the year. What happens if someone files a complaint against your company on January 30, 2019? Well, it depends on when the project was actually completed.

If the project was completed before 2019, you would be covered. This is the case, because the work was actually completed when the policy was still active. There are many benefits associated with occurrence insurance. After all, you’re going to be covered even if your policy has actually ended. However, you need to understand that occurrence insurance is going to be a tad bit more expensive. After all, there is no limit on when the claim can be filed against your company.

Just remember that there is really no winner when it comes to the battle between occurrence insurance and claims made insurance. You have to find the one that is right for you. The very best way to do that is by analyzing your business’s needs. Then, you should get in touch with ProfessionalsCoverage. We’ll make sure that you’re able to get the coverage that you require and the insurance form that is best for you!


occurange and claims made coverages


Claims Made Policies

Claims made policies are a little bit different. This specific type of insurance will protect you from claims reported during the policy’s active period. You can also extend the period and get coverage for an extended period of time. At the same time, the claim must take place after the retroactive start date of the policy. The coverage will only apply if both requirements are met.


What is Retroactive Coverage?

As an example, you should imagine that you acquired insurance on January 1, 2018. The coverage lasts a year and it has a retroactive date of November 1, 2017. What happens if a claim is reported in December of 2017? Would you be covered? The answer is yes. The claim was reported during the policy period and during the policy’s lifespan. However, you would not have been protected if the claim was reported in October of 2017 or earlier.


Extended Reporting Period (ERP)

You can also add an extended reporting period of tail coverage to your policy. This provides you with protection for a longer period of time after your policy has been cancelled. Pretty much every policy is going to offer some tail coverage. Be sure to chat with your agent to determine how long you’re going to be covered after your policy is cancelled.


Which Is Right For You?

When it comes down to it, claims made and occurrence insurance can both be equally beneficial. Finding the one that is best for you can be very difficult. If you have questions or need to learn more, you should get in touch with ProfessionalsCoverage. Our agents will provide you with the information that you need, so you can get the right insurance type for your business. Then, we’ll help you get the quote and the coverage that you need!


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