’s E&O Insurance Coverage is written on a Claims-Made Policy Form. What’s the difference between a Claims-Made and an Occurrence Policy Form?

Although price is an important consideration when shopping for errors and omissions insurance coverage, it’s not the most important thing. It’s best to keep in mind industry-specific E&O insurance options are complicated and understanding these options are the difference between having comprehensive business protection and a policy which does little to protect you or your assets against E&O Insurance Claims. At we have an online E&O Solution which is the Lowest Priced E&O Insurance Plan in North America.

Let’s discuss two types of professional liability insurance policies. Claims-Made and Occurrence are two common types of coverage forms for Errors & Omissions (E&O) insurance policies. Here’s a breakdown of the differences between them. Beware, if you are searching for an online E&O insurance solution, be sure you understand each of these tailored risk management solutions.

  1. Claims-Made Policy:
    • Coverage Trigger: A claims-made policy provides coverage for claims made and reported to the insurance company during the policy period.
    • Retroactive Date: Claims must arise from incidents that occur on or after the policy’s retroactive date. The retroactive date is typically the same as the policy’s effective date or an earlier specified date.
    • Extended Reporting Period (ERP)/Tail Coverage: If the policy is canceled or not renewed, an optional extended reporting period or tail coverage may be purchased to extend the time for reporting claims that arise from incidents that occurred during the policy period.
  2. Occurrence Policy:
    • Coverage Trigger: An occurrence policy provides coverage for incidents that occur during the policy period, regardless of when the claim is made or reported.
    • Retroactive Date: Occurrence policies do not have a retroactive date since coverage is triggered by the occurrence of the incident.
    • No Need for Tail Coverage: Once an occurrence policy is in effect, coverage continues for incidents that occurred during the policy period, even if the policy is canceled or not renewed. No additional tail coverage is required.
    • Pricing Stability: Occurrence policies typically have higher initial premiums, but the cost remains stable over time since there is no need to purchase tail coverage.

Key Considerations:

  • Claims-made policies require continuous coverage to ensure that incidents are covered even if a claim is made in the future. If coverage is terminated, purchasing tail coverage is crucial to protect against claims arising from incidents during the policy period.
  • Occurrence policies provide coverage for incidents that occur during the policy period, even if a claim is made years later. This long-term coverage can be advantageous, especially in professions where claims may be delayed or have long-tail exposure.
  • The choice between claims-made and occurrence policies depends on the specific needs and risk profile of the insured. Factors such as the nature of the business, industry standards, and regulatory requirements may influence the selection.

If you are considering switching your coverage to at Renewal, it is essential you confirm your current policy Retroactive Date, understand the terms, conditions, and coverage provided by your Industry-specific E&O insurance policy. Since our policy is also written on a Claims-Made Form, make sure you note your exact retroactive date on your new application for Errors & Omissions Policy. If you are new to the Insurance Business and have never maintained Errors & Omissions Coverage Limits in the past, no Retroactive Date is required. Your Policy Effective will be your Retroactive Date – not your license effective date.