An
occurrence policy is preferred over a claims-made policy.
In a claims
occurrence policy, the coverage is available for lifetime provided that the wrongful act has "OCCURRED".
Occurrence Policy. Claims made coverage responds only to claims during the policy period (or extended reporting period).
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.
This is when the other insurance is an "occurrence" policy with an effective date prior to the inception date of the claims-made policy; and the claims-made policy either has no retroactive date or has a retroactive date earlier than the expiration of the
occurrence policy.
The court noted that conversely, had the policy been an "
occurrence policy" it would have decided otherwise, since no notice of the occurrence of the incident had been given to Intermed.
"We're one of just a few companies in the country that has a per
occurrence policy for mold," said the client.
The
occurrence policy is treasured for its relative simplicity and because a continuous string of occurrence policies may not be quite as susceptible to potential gaps in coverage as may be the case with claims-made policies that are not appropriately handled by those holding the responsibility of managing a company's risks.
In short, the cause of the insured's liability determines the number of occurrences, but that cause does not trigger coverage under an
occurrence policy. Coverage is triggered by bodily injury or property damage.
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.