What is the difference between claims-made and occurrence insurance?

Claims-made insurance is a type of liability insurance that covers a business for legal liability arising from claims that are made during the policy period. This means that only claims reported during the policy period are covered. It is important to have a “tail” or “extended reporting period” added to the policy in Maryland to cover claims made after the policy period has expired if the policy is cancelled or not renewed. Occurrence insurance is another type of liability insurance that covers a business for legal liability arising from claims that are based on incidents that take place during the policy period, regardless of when the actual claim is made. For example, if a company purchased an occurrence policy on January 1, 2020 and an incident occurred during that policy period but a claim was not made until 2021, the company would still be covered. In summary, the primary difference between claims-made and occurrence insurance is that claims-made insurance only covers claims made during the policy period, while occurrence insurance covers incidents that occur during the policy period regardless of when the claim is made. In Maryland, it is important to add a “tail” or “extended reporting period” to claims-made policies to cover claims made after the policy period has expired.

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What is the difference between claims-made and occurrence insurance?

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