Which Is Better: Occurrence or Claims Made Coverage

One common question our customer service representatives receive is whether an occurrence or a claims made policy is better. Here is how they respond.

Insurance

Which Is Better: Occurrence or Claims Made Coverage

Our Insurance Client Service Center representatives take a lot of calls from doctors who have questions about their insurance coverage. Our goal is to help guide them in making the right decision for their individual situation. One common question is whether an occurrence or claims made policy is better.


Our representatives will respond that both occurrence and claims made policies have their advantages and disadvantages. They will explain that if you’re deciding between an occurrence and a claims made policy, you should evaluate your individual circumstances—now and in the future—and consider the following:

Occurrence

Occurrence coverage protects you against claims for alleged incidents that occur while the policy is in effect. Even if the policy later expires or is canceled, the coverage will be there to protect you for the period the policy was in force.

This is important because many times a patient can file a lawsuit months or even years after an incident took place. Coverage will be provided at the limits of liability, terms and conditions in effect at the time of the alleged injury.

Claims Made

Claims made coverage protects you against claims made and reported by you during the policy period. Coverage is provided at the limits of liability, terms and conditions in effect at the time the claim is reported. If you cancel a claims made policy, it’s recommended that you obtain “tail coverage” to provide coverage for claims for alleged incidents that took place but weren’t reported while the policy was in effect.

As is standard in the industry, tail coverage may not be available if the claims made policy cancels for nonpayment of premium, giving rise to a gap in coverage.

Why does NCMIC offer you both occurrence and claims made coverage when some insurers offer only one option? NCMIC believes in offering you the choice to customize your coverage to suit your own special needs and situation.

Read on for more details about how each type of policy compares.


The information in the NCMIC Learning Center is offered solely for general information and educational purposes. It is not offered as, nor does it represent, legal or professional advice. Neither does this information constitute a guideline, practice parameter or standard of care. You should not act or rely upon this information without seeking the advice of an attorney familiar with the specific legal requirements of the state(s) in which you practice. If there is a discrepancy between the site and an insurance policy you have with NCMIC, the policy will prevail.