Posted on February 25, 2010.
What is the difference between Made form of insurance claims and events? . . . and what is the point of initiation of a claim?
Oh, it's a huge difference.
On the factual allegations of the policy (common on malpractice, errors and omissions and directors and officers policies), the insurance company pays only the claims that are made during the period of insurance. The application must ALSO be (ie incindent, not only the demand) during the period of coverage. coverage period is the period of policy, all the way back to the date "retroactive".
What this means is that if you have an application that "occurs" on March 1, 2005, and your policy runs from the 01/01/05 01/01/06, if the application is not made before 01/01 / 06 (do not hang myself agents for the period is just an example), and you let your policy lapse, it is not covered. If you renew your polciy for the next three years, and the retroactive date is the date of the original policy, 01/01/05, so it would be covered.
On an event, there is no expiration date "to file a claim - whether the incident occurred during the period of insurance coverage is - even if the police ended 3 years ago, and there is no coverage.
It is a major reason why rates are lower medical malpractice when the physician starts first, and increase steadily during the first years 5-10 - the first year, the policy only covers 1 year claims. The second year, it covers 2 years of claims. The 3rd year, it covers three years of claims. Then, if the stores on the medical coverage, any new business is less expensive because. .. . they are only covering one year of claims, while the old company is on three or more.
Presence is always a better shape to have, it's just not always available.
Two very different approaches used by insurers to determine coverage of liability insurance in writing. The difference centers in the event that triggers coverage, and is known as the trigger of coverage "." The two approaches are known as "claims made and reported" ("event claims") and "."
For example, your policy management software may include commercial general liability insurance written on an occurrence basis. Your pension benefits liability, professional liability and liability insurance employment practices using the trigger of coverage claims.
The hedging policy trigger occurrence is linked to the date of the event or occurrence giving rise to the claim. Under a contract of accident, the policy in force at the date of the event causing the loss must respond to both defense and indemnity. The claim may arise years after the policy has expired, and the outbreak of accident coverage places little or no importance to the date of the insured receives notice of the application.
