What is the meaning of "claims-made coverage"?

Claims-made coverage refers to a type of insurance policy that provides protection for claims made during the policy period, without regard to when the incident that gave rise to the claim occurred. This means that as long as the claim is reported to the insurer while the policy is active, it will be covered, even if the incident took place before the policy was in force, provided the event occurred after any applicable retroactive date.

This type of coverage is particularly common in professional liability insurance, where actions or omissions that lead to claims can occur over a long period before a claim is actually made. Consequently, the important aspect of claims-made policies is the focus on the timing of when the claim is reported to the insurer, rather than when the incident itself occurred.

In contrast, other types of potential answers may reflect different kinds of coverage, but they do not encompass the comprehensive nature of claims-made policies. For example, protection for claims filed within a specific time frame pertains more to occurrence policies rather than claims-made ones. Also, the notion of coverage for past incidents may not align with the specifics of claims-made coverage, which is intrinsically tied to the active reporting of claims during a designated policy period. Lastly, protection that only applies after an incident has been reported