Claims Made Coverage
Claims made coverage is a form of liability insurance. Most of the time this coverage form is reserved for professional liability however, it can be used when writing general liability on large complex risks. This policy differs from and occurrence policy as with the occurrence policy the claim must occur during the policy term, however can be reported to the carrier at any time after the policy term. The claims made coverage form stipulates when the claim occurs and when it must be reported.
Common Insurance Terms
Claims Made Coverage is triggered when a claim is made against the insured during the policy period, regardless of when the wrongful act that gave the rise to the claim taking place. The claim must have occurred after the policy retro-active date for coverage to apply.
Claims Made and Reported Coverage stipulates that the claim must occur and be reported during the policy term for coverage to apply.
Retro Active Date is a date that represents the beginning of coverage in force. Claims that occur before this date will not be covered. This date can also be referred to as a continuity date or prior or pending date.
Tail Coverage is often called an extended reporting period in a claims made policy. This extends the amount of time allowable to report a claim after the expiration of the claims made policy. The length of time and premium for this is determined by the carrier.
Nose Coverage often called prior acts in a claims made policy is determined by the retro active date on the policy. Often a carrier will honor the retro active date even if the inception of the policy is after this date. This allows for claims that occurred on a prior policy, but after the retro active date to be reported on the current policy term.
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