Liability policies are divided into two categories. They are either an occurrence or claims made policy. When you have an occurrence policy, the claim stems from an event that had occurred during the contract period of the policy term. Eligibility for coverage depends on when the event occurred. However, with a claims-made filing, eligibility depends on the time period when the claim was made, regardless of when the event took place.
Underwriting With Business Policies
Commercial general liability policies are where you will most often find underwriting that includes claims made. General liability covers the damages that the named insured face when property damage or bodily injury occurs on the insured’s property or during business operations. The coverage areas are identified before the policy begins, but for an incident to be covered under a traditional occurrence policy, it cannot already be known about. In a claims-made scenario, the occurrence must have happened within the coverage territory.
For a claim to be addressed, it must be filed during the policy period. It is common for the claim to be made as soon as the insured becomes aware of it. However, these policies may contain a retroactive date, which excludes claims that might be filed for an incident that occurred prior to a specified date. The retroactive date is often established according to the date the claims made policy become effective.