Introduction
Occurrence vs Claims Made is a concept used in insurance to determine the type of coverage that an insured has. Occurrence policies provide coverage for claims arising from incidents that occur during the policy period, regardless of when the claim is made. Claims-made policies provide coverage only for claims made during the policy period, regardless of when the incident occurred. This article will explain the differences between occurrence and claims-made policies, as well as the advantages and disadvantages of each.
The Difference Between Occurrence and Claims Made Insurance Policies
Occurrence and claims made insurance policies are two distinct types of insurance coverage that provide protection for businesses. While both types of policies offer financial protection in the event of a claim, there are important differences between them.
The primary difference between occurrence and claims made policies is when the policy covers a claim. An occurrence policy provides coverage for any claim that arises from an incident that occurred during the policy period, regardless of when the claim is reported. A claims made policy, on the other hand, only provides coverage for claims that are reported during the policy period.
Another key difference between the two types of policies is the cost. Occurrence policies tend to be more expensive than claims made policies because they provide broader coverage. Claims made policies are typically less expensive because they only cover claims that are reported during the policy period.
Finally, it is important to note that occurrence policies can provide coverage for incidents that occur after the policy has expired. This is not the case with claims made policies, which only provide coverage for claims that are reported during the policy period.
In summary, occurrence and claims made insurance policies are two distinct types of insurance coverage that provide financial protection for businesses. The primary difference between the two policies is when the policy covers a claim, with occurrence policies providing coverage for any claim that arises from an incident that occurred during the policy period, regardless of when the claim is reported, and claims made policies only providing coverage for claims that are reported during the policy period. Additionally, occurrence policies tend to be more expensive than claims made policies, and occurrence policies can provide coverage for incidents that occur after the policy has expired, while claims made policies do not.