is liability coverage that responds during the policy period even if the claim is brought months or years after the policy expired.
These examples illustrate that changing from an occurrence policy
to a claims-made policy did not eliminate disputes about triggers of coverage.
In fact, a key to distinguishing a claims-made policy from an occurrence policy
is the very absence from an occurrence policy
of a discovery or manifestation requirement.
For example, if insurers systematically underestimate incurred losses for occurrence policies, using the reported loss ratio would overestimate the profitability of the occurrence policy
line of business.
Conversely, under an occurrence policy
, only the allegedly negligent acts' of the insured nurse, which occurred during the time the occurrence coverage was in effect are covered.
These policies are on a "claims made" basis, he explains, meaning coverage needs to be in effect when the claim is made, as opposed to an occurrence policy
such as auto or product liability.
An occurrence policy
, which is offered on general liability, automobile liability and umbrella forms, triggers coverage when an "occurrence" happens during the policy period, regardless of when the claim is made.
By way of contrast, an occurrence policy
is one that provides insurance coverage for claims that arise during the policy period even if the claim is made after the end of the policy period.
Obviously, the longer the term of the extended reporting period, the closer the claims-made policy will resemble an occurrence policy
Furthermore, the difference between claims-made policies and the more traditional occurrence policy
is underscored by the fact that under the claims-made insurance in this scenario the policy and the limits in force in 2010 will respond to the claim.
If you have an occurrence policy
in place, then the policy that was in force when the adverse event occurred is the policy that should respond.
An expired occurrence policy
will pay a valid claim, even if it is made years after the expiration.