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Occurrence and Claims Made Insurance Policies

I’m David Holub, an attorney focusing on personal injury law in northwest Indiana.

Welcome to Personal Injury Primer, where we break down the law into simple terms, provide legal tips, and discuss personal injury law topics.

Today’s question comes from a caller asking about the difference between the two main types of insurance policies: occurrence policies and claims-made policies. The caller broke his leg at a friend’s house last year, and the friend has liability insurance. Still, the caller cannot tell if coverage was in effect for his injury.

An occurrence policy generally provides lifetime coverage for the incidents occurring during a policy period, regardless of when the claim is reported.

For example, a policy covering the calendar year 2015 would pay claims made today for an incident discovered today that happened in 2015 while the policy was active. Even though 2015 is a long way off in the rearview mirror.

The occurrence policy protects from losses that happen while the policy is active. In other words, only incidents that occur during the policy year are covered.

The coverage time frame is much different for claims-made policies.

A claims-made policy only covers incidents that happen and are reported within the policy’s time frame.

A claims-made policy protects against a loss during the policy year. Also, with a claims-made policy, the loss typically must be reported while the policy is in force.

Notably, some insurers offer tail coverage or grant an extended-reporting period as an option with claims-made policies. The “tail” coverage allows you to file a claim even when the policy has expired.

When we get calls about insurance, we always must look at the policy language. Though there are many similarities in how insurance companies write coverage policies, there are enough differences that the actual policy at issue must be studied.

I hope you found this information helpful. If you are a victim of someone’s carelessness, substandard medical care, a product defect, work injury, or another personal injury, please call (219) 736-9700 with your questions. You can also learn more about us by visiting our website at DavidHolubLaw.com – while there, make sure you request a copy of our book “Fighting for Truth.”