An occurrence policy is preferred over a claims-made policy
. Occurrence policies cover all acts that occurred during the term of coverage, even if the claim is filed after termination of the policy and/or your employment.
When the standard claims-made policy
is issued, the trigger is when notice of the claim for damages because of bodily injury or property damage is received and recorded by the insured or insurer, whichever is first.
When should notice of a claim be given to the insurance company on a claims-made policy
? The self-evident answer would seem to be: when the claim is first made, but that begs the question.
That said, if there exists one or more completely dispositive bases to deny coverage, such as the claim against the insured having been first made before the policy period of a claims-made policy
, the investigation need not widen to determine facts that will not be covered regardless of their importance to the insured's case.
In effect, with a claims-made policy
, the insured must have the policy in effect when the alleged incidence of malpractice occurs and also have the policy in effect when the claim is filed.
The claims-made policy
generally requires the insured to report any claims to the insurer during the policy period or a time period specifically prescribed in the policy.
Physicians renewing a claims-made policy
are covered from the first year that they owned the policy.
With a claims-made policy
, it doesn't matter when the occurrence took place and it is clear which policy should respond to the claim.
Coverage for prior actions can become challenging in the event that a physician has a claims-made policy
, which offers protection only while the policy is in effect.
If a claims-made policy
is discontinued, the doctor must obtain "tail" coverage to cover past actions.
(27) Yet, inferring a discovery limitation in the policy effectively changes its nature to its less expensive cousin, the claims-made policy
. 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.