The way insurers cover you for claims is changing. Keeping on top of these changes and protecting your business is vital so you're not left exposed.
A policy providing coverage on a ‘claims made’ basis covers claims that are made against the insured and reported only during the policy period, independant of when the incident the claim relates to took place. As your insurance would have expired, your previous insurer would no longer accept the claim. The only exception to this is when a retroactive date is in place and applicable to a 'claims made' policy. In this case the incident the claim relates to must have taken place in or after the retroactive date.
A policy providing coverage on a ‘claims occurring’ basis covers claims that occur during the policy period, regardless of when a claim is made. What this means is that even if you have changed insurer or your insurance expired, your old insurer will still accept the claim.
When a ‘claims made’ policy lapses or is cancelled, the historic cover paid for expires. It may seem unfair, but as an increasing amount of insurance companies provide insurance on such a basis it's important to be aware of. The reason insurance companies will generally offer insurance under a claims made basis is for them to limit exposure.
Insurer 1 - Insurance Period: 1st January 2017 – 31st December 2017
Your company is insured with Insurer 1 on the above dates, upon finding a more competitive quote you move insurers to Insurer 2 and start your policy with them on the 1st of January 2018.
On the 2nd of January a liability claim is reported to Insurer 1 where the incident date was the 27th of December 2017. If a claim is reported to the original insuqrer and the insurance period has ended, they will not proceed to settle the claim. If you / your company has not sourced “run off” cover this will put you in a difficult position of not being insured by Insurer 1, nor Insurer 2 for the claim.
Using the same dates and example as above, even though the liability claim was made after the insurance with Insurer 1 had ended, having had a claims occurring policy it means that they would still be obligated to cover you for the claim, even though the insurance period had ended and you had a new insurer.
As you can see from the above examples, where possible it is our opinion that a ensuring you have a claims occurring based policy can be important to protect you and your business.
We take pride in being able to provide specialist dental indemnity policies on a claims occurring basis*, ensuring that you receive the optimum level of cover to protect your business even after you've changed insurer or your policy has expired.
*based on your circumstances and answers given on our quotation form.
While care has been taken in the production of this article and the information contained therein has been obtained from sources that MMI 4u considers to be reliable, MMI 4u does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the article or any part thereof and can not be held liable for any loss incurred by any person relying on it in any way whatsoever. Therefore the reader shall in any case be entirely responsible for the use to which this article is applied.