Insurance - Occurance vs. Claims Made Policies

1

I’m in the process of changing insurance companies to NACHI’S promoted Elite MGA.

The coverage they provide is a “claims-made” policy. To my understanding, on this type of policy both the issue and claim must be made within the active policy period.

A hold a license (in Mpls) for a pre-sale inspection program that requires an “occurance” policy. Apparently, with this type of policy the issue needs to occur during the active policy period, but a claim can be made after active policy period expires.

For example, let’s say it’s winter in MN & I accidentally left a boiler or furnace off in a vacant home. Several days later the pipes burst. If my claims-made policy expired between the time I was at the home and when it was discovered, I would not have coverage. With a occurance policy I would be covered.

Anyway, just curious if anyone has come across this issue? A claims-made policy seems to leave you potentially vulnerable to personal liability.

Jeff

2

I have not, but definitely iron out those scenarios with your insurance provider and make sure you are covered as required and with that the coverage that lets you sleep at night.

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3

Is this for GL or E&O or both? You would have to ask them if they would accept any other type of policy with some exception. Often with a claims-made policy you can buy what’s known as “tail” coverage at the end, when you cancel the policy or your policy is cancelled. This will protect you to against claims on expired/cancelled policy. It’s best to talk to an insurance broker about this.

4

Welcome back to our forum, Jeff!..Enjoy! :smile: