Insurance is a wide fame thing among the people and it may be personal or commercial, people would tend to have insurance for all their belongings to be on the safer side. When it comes to insurance policy, there are several options offered to the people where they can choose the desired beneficial insurance policy. However, the small business such as real estate agents, contractors, landscaping companies and other widely purchased commercial liability insurances. When it comes to commercial liability policies the insurance companies provide only two basic policies are occurrence made and claims made. Majority of business people would be confused whether to choose occurrence or claim policies. What is the difference between claim made and occurrence policies? The main primary difference between claim made vs occurrence is their coverage trigger time that initiates the coverage. In occurrence made policy type is triggered when any injury occurred when the policy is in effect. At the same time a claims made policy is triggered just by claiming a file when the policy period got over. However the professional liability would be clearly mentioned in occurrence policies that include errors, omission and other terms and conditions.
Coverages of claims made Vs occurrence policies:
As it said before with claims made and occurrence policies only the coverage’s differ to make clear enough here are coverage areas of both claim made and occurrence policies are listed below.
Occurrence Coverage: occurrence type policy overage when any damage caused at any occurrence when the policy is present. But majority people, who take occurrence type, are not aware about its coverage so here are some coverage claims and its terms for occurrence type are listed below.
- The insurance covers claims for all offensive injuries the claim covers injury of alleged body, property damage or any offense during policy period.
- For different types of liability insurance a separate occurrence form should be written either it may be auto policy covers, property damage or body injury each can be claimed in occurrence policy.
- If it is employee’s liability then the occurrence covers even at the last day, when an employee is exposed to diseases or accidental occurrence they can approach for a claim. This comes within policy term
In addition to all above mentioned terms and conditions the main advantage of having occurrence policy is till the policy exists the claim can be done without any problem even after policy trigger date is crossed.
Claim made: in claim made policies the coverage should be claimed by filling the incidence that too if the policy is existing the coverage is possible. In case if there is any switch over from claim made policy to occurrence then there is a coverage gap, in that case, the claim made insurance would not claim the file. Thus the important aspect is claim made policy covers incidents that are reported only within policy time to continue as lifetime coverage similar to occurrence policy people need to purchase tail occurrence for their claim made policy.
On the whole if you wish to have lifetime coverage then occurrence policy is the best option if it is for a certain time period it is better to go with a claim made policy type.
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.