Claims made versus claims occurred
Whether a policy pays a claim depends on a number of things; one of the variants that often causes confusion is whether your policy is on a ‘claims made’ or ‘claims occurred’ basis. Most people believe a policy is only valid for 12 months but this is not the case. Policies can be written on two bases.
A ‘claims made’ policy will pay out during your 12 month policy regardless of when the incident occurred. For example if a claim arises from 2007 when you were insured by ABC Insurance but when the claim arises you are insured by XYZ Insurance on a claims made basis – XYZ Insurance will pay your claim. This type of policy is typical in Professional Indemnity and means if you change insurer all your work from inception, or and agreed retroactive date is insured.
A ‘claims occurred’ policy will only pay out for claims that arise out of loss or damage that occurred during the 12 month period that they are currently insuring you for.
At Edison Ives we are specialists in the two types of policy wordings and can offer advice to ensure you are insured correctly and under the right basis. Please Contact Us and we would be happy to review your current policy.