A claims-made policy generally responds when a claim is first made and reported as required during the policy period or an applicable extended reporting period.
Definition
A claims-made policy is a coverage form whose response generally depends on when a claim is first made against the insured and whether it is reported within the period and manner the policy requires. Professional liability coverage for engineering firms is commonly written on this basis. The policy may also set a retroactive date, which can restrict coverage to professional acts occurring on or after that date. An extended reporting period may allow certain later reports about earlier work after the policy ends, subject to its terms. Claims-made does not mean every claim made during the policy period is covered: exclusions, limits, notice requirements, and other conditions still apply. Firms may compare policies by trigger, reporting rules, retroactive date, and available tail coverage. It is not the same as an occurrence policy, which generally focuses on when injury or damage happens. See professional liability insurance for related context.
How owners use it
- Owners compare reporting requirements and retroactive dates when reviewing professional liability renewals or a proposed insurer change.
- A firm records the policy period, retroactive date, and notice instructions alongside project records so it can identify which policy may apply to a later claim.
- If a claim is first made in June and the policy requires reporting during its period, the firm checks whether the policy remains active and reports it under the stated procedure.
- Owners distinguish claims-made professional liability coverage from occurrence-based coverage when reviewing client insurance requirements.
