How is Claims Made Different from an Occurrence Policy Form?

When a new submission is received from a customer, we may offer quotes for both Claims Made and Occurrence policy forms.  Most customers do not understand the difference between the two forms along with the difference in premium. 


Claims Made coverage responds to claims based on when the claim is first made against an insured, which means you must have coverage in effect when the claim is filed.

Occurrence coverage provides protection during the covered policy period, regardless when the patient files a claim. 


As long as the incident occurred during the policy period, the Occurrence policy will respond – even if the claim is made after the policy expires or after you stop practicing.


Consider this example:

Dr. Smith has an Occurrence form and Dr. Taylor has Claims Made form, both practices for seven years.  Both physicians are sued in 2017 for a service provided in 2012.  Which policy year would correspond to the claim?

For Dr. Smith with the Occurrence policy, the 2012 policy would respond because that was the year the incident occurred. 


With Occurrence coverage, it doesn’t matter when the claim is filed; all that matters is the year in which the incident occurred.



For Dr. Taylor with the Claims Made policy, the 2017 policy would respond to the claim as long as the Policy’s retroactive date was prior to 2012.  Claims-made policies respond to a claim when it is made.


Why is there a price difference between the two forms? 

Claims Made tend to be less expensive than Occurrence. Because a malpractice lawsuit is filed on average 2 to 3 years after the patient treatment, the physician’s risk of a malpractice claim being filed is generally lower during the first few years of practice.


After each renewal, the policy “matures” as the risk of a malpractice claim being filed increases.   The claims-made premium cost will increase or “step-up” over approximately 5 years until it is close to the Occurrence rate. 


The important thing to remember is that the difference in cost is really a difference in coverage. 

Have questions? We have the answers!

Rockwood are experts in professional and management liability insurance. Let us help you answer your clients’ questions so they understand what coverage options are available and can feel you have provided them that peace of mind that their business is properly protected.


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Kathy Hasted is currently a Senior Underwriter at Rockwood, and is responsible for both the agency’s Allied Healthcare and Not-For-Profit D&O portfolios.  She has been a Rockwood employee since 1997.  Ms. Hasted began her insurance career at the Insurance Company of North America.