Understanding claims-made insurance policies

Insureon Staff.
A claims-made insurance policy must be active at the time you submit a claim in order to provide benefits.
View video transcript.

As a small business owner, you know it’s important to understand how your insurance policy works.

A claims-made policy provides benefits only if you file a claim after the policy start date. If you cancel your policy and then report a claim, it will not be covered.

In this case, if you had a $1 million claims-made policy and are sued for $1 million in your first year, you’d no longer have coverage. That is, unless you increase your policy limit in the second year.

Occurrence-based and claims-made policies are often found in specific types of insurance coverage.

For example, claims-made policies will often be found in your directors and officers coverage and your professional liability insurance, which is also referred to as errors and omissions insurance.

If you’re just starting out, you may want a lower cost claims-made policy.

Get the right coverage for your small business with Insureon today. Click the link to get started.

You have a claims-made insurance policy. But what does that mean? It provides benefits only if you file a claim while it’s active. Essentially: no active policy, no coverage.

Both directors and officers insurance (D&O) and professional liability insurance (also referred to as errors and omissions insurance or E&O) are typically claims-made policies. Most other policies, like general liability insurance, are occurrence-based policies that provide coverage for incidents that occurred during the policy period, even after you cancel coverage.

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