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📌 '''Claims-made trigger''' is the coverage activation mechanism under which an [[Definition:Insurance policy | insurance policy]] responds only to claims first reported to the insurer during the policy period, regardless of when the underlying wrongful act or event actually occurred. This stands in contrast to the [[Definition:Occurrence trigger | occurrence trigger]], where coverage attaches based on when the loss event took place. Claims-made policies dominate [[Definition:Professional liability insurance | professional liability]], [[Definition:Directors and officers liability insurance (D&O) | directors and officers]], [[Definition:Errors and omissions insurance (E&O) | errors and omissions]], and [[Definition:Cyber insurance | cyber insurance]] markets, where long-tail exposures and latent injuries make occurrence-based pricing impractical.

🔄 Under a claims-made structure, two dates govern whether a claim triggers coverage: the [[Definition:Retroactive date | retroactive date]] and the policy's expiration date. The retroactive date sets a floor — acts occurring before it are excluded — while the claim itself must be reported before the policy expires. Many policies include a [[Definition:Reporting endorsement | reporting endorsement]] or [[Definition:Extended reporting period (ERP) | extended reporting period]] (sometimes called a "tail") that allows the insured to report claims for a defined window after the policy ends, protecting against the gap that would otherwise arise when switching carriers. Insurers benefit because the claims-made approach gives them greater certainty over the timing and volume of reported losses, simplifying [[Definition:Loss reserve | reserving]] and reducing the volatility associated with [[Definition:Incurred but not reported (IBNR) | IBNR]] estimates.

⚠️ For [[Definition:Policyholder | policyholders]] and [[Definition:Broker | brokers]], understanding the claims-made trigger is essential to avoiding unintended coverage gaps. A failure to maintain continuous, uninterrupted claims-made coverage — or to secure an adequate [[Definition:Extended reporting period (ERP) | tail]] when a policy is canceled or non-renewed — can leave an insured exposed for acts that occurred during a prior policy period but are reported later. From the insurer's perspective, the claims-made trigger allows tighter control of [[Definition:Underwriting | underwriting]] exposure and enables more responsive repricing as risk conditions change, which is why it has become the default structure for most [[Definition:Liability insurance | liability]] classes involving long emergence periods.

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

Definition:Claims-made trigger - Revision history

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