What type of insurance pays claims made during the term of the policy, limiting future liabilities?

Claims Made Coverage is a specific type of liability insurance that provides coverage for claims that are made against the insured during the policy period. This means that if an incident occurs, but a claim is reported after the policy has expired, the insurance will not cover that claim, limiting future liabilities to those claims made while the policy is active. This coverage is essential for legal practitioners and other professionals where claims can be reported long after the service has been rendered.

This type of insurance stands in contrast to Occurrence Coverage, which provides coverage for incidents that occur during the policy period, regardless of when the claim is filed. In other words, if a covered event happens during the time frame of the policy, it is covered even if the claim is made afterward.

Excess Liability Coverage only kicks in when a primary liability insurance policy has reached its limit, providing additional coverage beyond that limit. General Liability Coverage typically provides a broad range of protection against various types of liabilities but does not focus specifically on the timing of when claims are made versus when incidents occur.

Understanding this distinction is crucial for managing risk and ensuring adequate protection against potential claims in a legal practice.