What's the Difference Between Claims Made and Claims Occurring?


Before taking out any business insurance policy it is important to read the fine print and understand what you're purchasing. If you're not sure on the difference between 'claims made' and 'claims occurring', or which you should choose, read on.

What Does 'Claims Made' Mean?

This type of policy provides coverage when a claim is made, regardless of when the incident in question took place - it simply has to be after the retroactive date detailed when the cover was incepted.

This retroactive date will be carried forward every time a policy is renewed. However, if you do not renew or replace a claims made policy, you will not be covered should any new circumstances arise.

At the end of the cover period, the policy will not automatically renew and therefore it should be updated as soon as it expires.

This time of cover is popular for professional indemnity policies.

What Does 'Claims Occurring' Mean?

Also known as a 'claims occurrence' policy, this covers claims that occurred during a set policy period. When the claim is made is regardless, even if this is after the policy was cancelled.

This type of policy provides cover for a set period of time and is valid for life, therefore you and your business is covered for any work that was carried out during a set period of time even if the cover has lapsed.

This kind of insurance is becoming increasingly popular as it minimises the exposure and risk to insurers. Claims occurring cover is particularly common for employers' liability insurance and public liability insurance.

Which Should You Aim for?

So, in short, a claims made policy provides coverage for when an incident is reported, whereas a claims occurring policy covers for when the incident occurs.

Both types of policies have their benefits and drawbacks, therefore the type of cover should be considered on a case by case basis and chosen in line with individual business needs.

For example, a poor foundation can cause damage years later that can be catastrophic. In this case, a claims made policy will not cover you but a claims occurring would. Simply report the claim to the insurer with whom you held the policy at the time of the work. This can still be done even if you have changed insurers since.

If all things are equal, claims occurring is often preferred to claims made.

Learn More About Business Insurance

If you have further questions about the different types of business insurance policy or what cover you need, contact our knowledgeable team on 0800 470 4648. Alternatively, search for the type of insurance you require and compare quotes from multiple providers online here. We help you choose the right protection for you!

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