While Occurrence coverage is based on when the act occurred, Claims-made coverage is based on when the act is reported (when the claim is made). Claims-made policies provide coverage for claims that are reported to the insurer while the policy is in force. Claims-made coverage typically costs $200-$400 less annually than an Occurrence policy.

Tail Coverage

For Claims-made policies, an Extended Reporting Period (ERP) Endorsement, commonly called “Tail Coverage”, may be required to provide protection for claims that are reported after the policy’s termination date. In the event of cancellation or non-renewal, you will need to make sure you purchase a “Tail Policy” or have your new carrier pick up your Prior Acts. High-quality Claims-made coverage from the leading carriers will include a FREE tail at Retirement, Disability or Death. If not included for free Tail coverage costs additional premium beyond your Claims-made policy, typically about double the annual premium cost. It is a one-time payment and is only available for purchase for a certain period of time following your policy cancellation. The deadline for purchase can vary by carrier–be sure to understand these time periods prior to cancellation.

• Purchase of a Tail policy from your current carrier prior to moving coverage
• Include Prior Acts coverage in your new policy with your new carrier.

Prior Acts

If you have a Claims-made policy and you plan to move your coverage to a new carrier, in order to have your Prior Acts covered you will need:

• to have your retroactive date on current policy pick up by the new carrier or…
• purchase a Tail policy.