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📋 '''Claims-made policy''' is a form of [[Definition:Liability insurance | liability insurance]] that covers losses only when the [[Definition:Claim | claim]] is first reported to the insurer during the active policy period — regardless of when the underlying incident actually occurred, provided it took place after a designated [[Definition:Retroactive date | retroactive date]]. This structure contrasts sharply with the [[Definition:Occurrence policy | occurrence policy]], which triggers coverage based on when the event happened, even if the claim surfaces years later. Claims-made coverage is the dominant form for professional lines such as [[Definition:Directors and officers insurance (D&O) | directors and officers (D&O)]], [[Definition:Errors and omissions insurance (E&O) | errors and omissions (E&O)]], and [[Definition:Medical malpractice insurance | medical malpractice]] insurance.

⚙️ Under a claims-made form, the insurer's exposure is bounded by two temporal anchors: the retroactive date, before which no claims are eligible, and the policy's expiration date, after which new reports fall outside coverage unless the insured purchases an [[Definition:Extended reporting period (ERP) | extended reporting period]] — commonly known as "tail coverage." When a policyholder switches carriers or lets coverage lapse, the gap between policies can leave prior acts unprotected, which is why [[Definition:Prior acts coverage | prior acts coverage]] negotiations are a critical part of the [[Definition:Underwriting | underwriting]] and [[Definition:Broker | brokering]] process. Insurers favor the claims-made trigger for long-tail lines because it gives them greater control over [[Definition:Loss reserve | reserving]]; they can more accurately match [[Definition:Premium | premiums]] collected in a given year to the claims reported in that same year.

🔍 For insurers, the claims-made structure materially reduces the uncertainty associated with [[Definition:Incurred but not reported (IBNR) | incurred-but-not-reported (IBNR)]] liabilities, making [[Definition:Actuarial analysis | actuarial analysis]] and [[Definition:Loss ratio (L/R) | loss ratio]] projections more reliable. Policyholders, on the other hand, must be vigilant about maintaining continuous coverage and understanding the implications of the retroactive date — a gap or a moved-forward retroactive date can silently eliminate protection for past professional acts. The distinction between claims-made and occurrence policies also has significant [[Definition:Reinsurance | reinsurance]] implications: [[Definition:Reinsurer | reinsurers]] pricing [[Definition:Excess of loss reinsurance | excess-of-loss]] treaties on claims-made books face a different development pattern than they do on occurrence portfolios, affecting both [[Definition:Ceded premium | ceded premium]] calculations and [[Definition:Commutation | commutation]] negotiations.

'''Related concepts'''
{{Div col|colwidth=20em}}
* [[Definition:Occurrence policy]]
* [[Definition:Extended reporting period (ERP)]]
* [[Definition:Retroactive date]]
* [[Definition:Liability insurance]]
* [[Definition:Incurred but not reported (IBNR)]]
* [[Definition:Prior acts coverage]]
{{Div col end}}

Definition:Claims-made policy - Revision history

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