What is a “claims made” liability insurance policy?

A “claims made” liability insurance policy is a policy that is supposed to provide coverage for an accident or other act of negligence that is reported during the policy period.  Coverage may attach or apply to events that occurred before the policy of insurance was purchased, but were reported afterward.

A key element of a “claims made” policy is what is called “tail” coverage.  Since claims made policies may provide coverage for events that occurred before coverage was purchased, it is usually critically important for the insured and the insurance company to know what kinds of accidents or potential events occurred before the policy period that may turn into claims.  These events would fall under the “tail” of the claims made policy.  Generally, the insurance company and the insured are free to negotiate whether “tail” coverage will apply at all, and if so, how long the “tail” may be.

“Claims made” policies are confusing for everyone involved — from insurance agents to claims professionals and adjusters, to lawyers.  Even people intimately involved in the insurance industry will often disagree about whether coverage will apply to a specific accident or event under a “claims made” policy.  For this reason, “claims made” policies are very often the subject of litigation, as parties seek a declaration from the Court as to what their rights are.

If you have a question regarding a “claims made” policy, call Orlando personal injury attorneys Kim Cullen or Robert Hemphill at 407-565-7386.