When Is an Occurrence Not an Occurrence

Although there is controversy behind this statement, it is axiomatic that not every type of loss is covered by insurance. In fact, in order to obtain coverage for a particular loss under a standard liability insurance policy it must first be considered an “occurrence.” In an insurance context, an occurrence is usually synonymous with “accident.”

It is important to understand the difference between the two most common types of professional liability insurance plans — “Claims-Made” and “Occurrence.”

Occurrence coverage is the most desirable form of coverage. It is complete when you purchase it and on cancellation continues to provide coverage for future claims based on conduct that took place during that policy term. The limits that are available to pay a claim are the limits that were in place during that policy term that the service was rendered.Premiums for this product are level except to the extent that a company may increase or decrease premiums over time.

Under a “Claims-Made” policy, the policy covers claims made against you only while the policy is in effect. The down side of this type of policy is that coverage must be continued indefinitely to assure coverage for claims filed in the future for actions that occurred in the past.

Professional Protective Alliance wants to provide you with insurance information so you can make informed decisions. If you have any questions, call us. We will take as much time as you need to explain policy terms to your satisfaction.