Claims-Made vs. Occurrence Malpractice Insurance (2024)

FAQs

Claims-Made vs. Occurrence Malpractice Insurance? ›

From a pricing viewpoint, occurrence policies are more expensive than comparable claims-made policies because they provide coverage for incidents that occurred during the policy year regardless of when the claim is reported. And the occurrence policy provides a separate limit for each year protection is purchased.

A claims-made policy only covers those that occur and are reported within the policy's timeframe, unless tail coverage is also purchased. An occurrence policy provides lifetime coverage for incidents that take place during a policy period, regardless of when the claim is reported.

Occurrence malpractice insurance provides coverage for incidents that occurred during the policy year, regardless of when a claim is reported to the carrier. Claims-made malpractice insurance provides coverage if the policy is in effect both when the incident took place AND when the claim is filed.

Tail coverage extends the time alleged incidents may be reported on a claims-made policy. A tail offers coverage for incidents that happen while the claims-made policy is effective but are reported after the policy has expired.

Retroactive Coverage: A claims-made policy may have a retroactive date that determines when claims will not be covered. This means that claims arising from events that occurred prior to the retroactive date will not be covered by the policy. An occurrence policy, on the other hand, does not specify a retroactive date.

Claims-made coverage is portable. You can take the coverage from one insurance company to another. The advantage to an occurrence policy is its permanence. The period of time you are insured under an occurrence policy is protected forever by the policy you had that year.

Because the acts taking place during an occurrence policy are normally covered regardless of when the 'claim' is made, coverage for acts taking place during the policy period remains in place even after the occurrence policy expires or a switch is made to a claims-made policy.

Occurrence. There are two basic forms of business insurance coverage to select from: a claims-made form and an occurrence form. The only difference between a claims-made and occurrence policy is how their coverage is activated.

An occurrence policy covers claims made for injuries sustained during the life of an insurance policy, even if they're filed after the policy is canceled. They cater specifically to events that may cause injury of damage years after they occur, such as exposure to hazardous chemicals.

A 'claims occurring' policy wording covers claims that occur during the policy period, irrespective of when the claim is made. So you may have changed insurer, but they will still accept a claim even though the policy has ended.

What is the difference between tail coverage and malpractice insurance? ›

Tail coverage is liability coverage for physicians that extends beyond their previous claims-made medical malpractice insurance coverage. It protects physicians when a former patient claims malpractice that took place during the physician's previous plan's coverage period.

In some cases, a physician might have to stay with an employer for at least five years to earn free tail coverage. Or the employer will agree to pick up the tail if the physician is terminated without cause, while physicians who leave with cause would have to pay for it themselves.

What is a claims-made policy? With a claims-made policy, your coverage only kicks in when you file a claim during the policy period. As long as an insurable event happened after the policy's retroactive date, your insurer should provide coverage. A claims-made policy covers claims filed while your insurance is active.

A “Claims Made” policy provides coverage for claims when the incident is reported. A “Claims Occurring” policy provides coverage for when the incident occurred. An example would be if there was fault in work that you carried out ten years ago, but it has only just been reported today.

Both forms are identical EXCEPT: at which point coverage is activated. The trigger for the Occurrence form is the date of the incident. The trigger for the Claims-Made form is the date the claim is made or submitted. This is the Coverage Trigger.

The term "occurrence" encompasses more than just an accident because accident is narrower in scope than occurrence. This can be seen in those cases decided before the occurrence wording was adopted. Accident, according to these cases, did not include coverage for damage occurring over time.

An occurrence policy provides coverage for incidents that happen during your policy period, regardless of when you file a claim. These policies can be more expensive than a claims-made policy because of how long coverage applies.

Claims-made insurance provides continuous coverage for your prior acts as long as you have insurance today and maintained it continuously in the past. Your current policy pays for claims arising from incidents that happened long ago even if you had insurance with another company.

An occurrence is a single event that results in a single insurance claim. In home insurance, common occurrences include break-ins, fires, burst pipes, or even a dog bite that leads to a liability claim. Each incident for which a homeowner could make an insurance claim is one occurrence.