Is an Occurrence Based product better than a Claims made product?

Whether an occurrence-based product is better than a claims-made product depends on a variety of factors, including the nature of your business, your risk profile, and your budget.

Occurrence-based policies provide coverage for incidents that occur during the policy period, regardless of when a claim is made. This means that if an incident occurs during the policy period, you will be covered for any resulting claims even if they are made after the policy has expired or been cancelled. Occurrence-based policies are often preferred by businesses that have a long tail exposure, which means that claims may be made many years after an incident occurred, such as in the case of medical malpractice claims.

In contrast, claims-made policies cover claims that are made during the policy period, regardless of when the underlying incident occurred. Claims-made policies are often less expensive than occurrence-based policies, but they may require the purchase of additional coverage such as extended reporting period (ERP) coverage or tail coverage in order to cover claims made after the policy has expired or been cancelled. Claims-made policies are often preferred by businesses with lower risk profiles or those that are looking to keep their insurance costs lower.

Ultimately, the decision of whether to choose an occurrence-based policy or a claims-made policy depends on the specific needs and risk profile of your business. It is important to consult with a licensed insurance agent or broker who can help you evaluate the benefits and drawbacks of each type of policy and recommend the best coverage options for your business.