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Foreign Policy Analysis
What is a Claims-Made Insurance Policy?

What is a Claims-Made Insurance Policy?


Hello. My name’s Ryan Hanley; I’m the Director
of Marketing for the Muray Group Insurance Services. Today, we’re dipping
into the mailbag. Today’s question comes from Sara, who owns a small
professional firm just outside of Saratoga, New York. Sara asks: Dear Ryan,
what is a claims-made insurance policy? I love that Sara asked this
question, because it means she’s looking deeper into her insurance policies,
in this case, her professional liability policy. A claims-made insurance policy is commonly
used with professional liability insurance, such as directors and officers
insurance, accountants or legal liability insurance, and errors and omissions
policies. In a claims-made insurance policy, coverage is triggered by
the date the insured first became aware of the possibility that a claim
may have occurred; this is the incident, and the insured has notified their
insurance carrier of such knowledge. The insurance policy in force on
the date the insured was made aware is the insurance carrier that will respond
to the claim. The policy period for a claims-made policy extends backward
to the retroactive date, which is usually the date of the very first
professional liability policy you purchased for your business. Therefore,
the policy will provide coverage for claims made today, stemming from
actions or events all the way back to that retroactive date. A claims-made
policy requires the claim to be made during the policy period or an extended
reporting period of an in force policy. The most widely used claims-made
policy provides coverage only for losses which occurred after the retroactive
date and were reported during the policy period, or extended reporting
period. Most professional liability insurance carriers
have begun to get away from claims-made policies in exchange for occurrence
policies, which are very similar if not in some cases handled the exact
same way as a commercial general liability policy or your business
owner’s insurance policy. Sara, thank you for your question. I hope
that this response helped. I know it was brief, but I didn’t want to dive too
deep in this video. It’s a very important topic for anybody who has professional
liability, they should understand what claims made is. If you’d like
to submit an insurance- related question, be it personal, business,
or life insurance-related, please use the comment section below this
video, and I’ll make sure to get your answer as soon as possible. If you haven’t
already, click the box on my right, you can see it right here. Download
your free copy of ‘The 37 Free Home Maintenance Tips Guide’. This is
a guide that we put together to improve the value of your home and reduce
the chance that you ever experience and insurance claim. The tips are
relatively basic, but they’re definitely going to help you keep money in
your pocket, where it should be. My name is Ryan Hanley. I hope you enjoyed
the answer to this question. I hope it helps you make a better decision when
purchasing your insurance. I hope you have an absolutely wonderful day.

2 comments on “What is a Claims-Made Insurance Policy?

  1. Ryan, thanks for the explanation. I have a question: what does the general aggregate limit cover in an insurance policy? Can you give me an example? Thank you for your help!

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