Occurrence and Claims-Made Coverage
An Insurance Company may insure claims on a per occurrence or claims-made basis, which is determined when issuing an insurance policy to an Insured. When a Policyholder reports a claim, it is imperative that the Insurance Company review the coverage terms to verify an active policy is in place based on the occurrence and report dates of the claim.
Occurrence-based policies provide coverage for valid claims incurred during the term of the insurance policy, regardless of if the claim is reported after the expiration of the policy. Claims-made policies provide coverage for valid claims reported to the Insurance Company regardless of if the claim was incurred in an earlier period, subject to a retroactive date, which is the earliest date a claim may be incurred in order to seek coverage.
Paying close attention to the type of coverage provided is important to verify that coverage exists for claims submitted for reimbursement, as well as to accumulate meaningful data for financial and actuarial projections.