claimsmade

Claimsmade, often written as claims-made, refers to a type of professional liability insurance in which coverage is triggered when a claim is made during the policy period, rather than when the underlying incident occurred. A claimsmade policy typically requires that the act giving rise to a claim occur after a specified retroactive date and that the claim is reported within the policy term.

Key features include a retroactive date, which limits coverage to acts after that date and can be used to cover or exclude prior acts depending on the policy. The policy is usually written for a defined period, commonly one year, and maintaining continuous coverage is important to preserve eligibility for claims arising from prior acts. If a lapse occurs, a tail or extended reporting period (ERP) may be purchased to allow claims to be reported after the policy ends, for acts that occurred during the prior coverage period. ERP can be optional and may require a premium.

Notification and reporting requirements are central to claimsmade policies. Policyholders must notify the insurer of a claim during the policy period, and failure to do so can result in denial of coverage. Some policies also require prompt reporting of potential claims or circumstances that could lead to a claim.

Pros of the claimsmade form include typically lower initial premiums and more predictable pricing for professional risks. Cons include the potential cost of tail coverage after a lapse or when changing insurers, and the need for careful management of renewal dates to avoid gaps.

Claimsmade policies are common in professional liability lines such as legal, medical, accounting, and certain consulting fields, where claims can emerge long after the act in question.