A Video Explaining the Difference Between Claims Made and Occurrence Policies

Read the full article at https://www.linkedin.com/pulse/errors-omissions-claims-made-reported-policy-barry-zalma-esq-cfe and see the full video at https://youtu.be/DvxXr2Toh5w and at https://rumble.com/vny2t6-a-video-explaining-the-difference-between-claims-made-and-occurrence-polici.html and at https://zalma.com/blog plus more than 3950 posts.

When purchasing errors and omissions insurance the insured must be aware that the policy will invariably only respond to claims that are made and reported during the policy period. further, since the application becomes a part of the policy and is incorporated into the policy the insured is warranting the absolute truth of every statement made in the application.

Claims-Made policies are common in the professional liability insurance market. They differ from traditional “occurrence”-based policies primarily based upon the scope of the risk against which they insure. With claims-made policies, coverage is provided only where the act giving rise to coverage is discovered and brought to the attention of the insurance company during the period of the policy. The essence of a claims-made policy is notice to the carrier within the policy period. Claims-made or discovered policies are essentially reporting policies. If the claim is reported to the insurer during the policy period, then the carrier is legally obligated to pay; if the claim is not reported during the policy period, no liability attaches.

Courts have found that claims made policies do not offend public policy and serve a useful function in permitting insurers to more closely control the risks they wish to insure. [Scarborough v. Travelers Insurance Company, 718 F. 2d 702 (5th Cir. 1983); Langley v. Mutual Fire, Marine and Inland Insurance Company, 512 So. 2d 752 (Ala. 1987); Zuckerman v. National Union Fire Insurance Company, 495 A. 2d 395 (N.J. 1985) And Gulf Insurance Company v. Dolan, Fertig and Curtis, 433 So. 2d 512 (Fla. 1983).

© 2021 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders.


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