We often get questions about the difference between Occurrence and Claims-made policies when it comes to professional liability insurance.  Provincial pharmacist colleges often accept both types of coverage – so what’s the difference?  The main difference is that you are required to purchase an extended reporting period if you have a claims made policy whereas with an occurrence policy, you don’t need to purchase this extra coverage after you end the policy.  We explain why below:

Occurrence Coverage

An Occurrence policy protects you from any covered incident that “occurs” during the policy period, regardless of when a claim is filed. An occurrence policy will respond to claims that come in – even after the policy has been cancelled – so long as the incident occurred during the period in which coverage was in force.

In effect, an Occurrence policy offers permanent coverage for incidents that occur during the policy period.

Claims-made Coverage

Claims-made policies provide coverage for claims only when BOTH the alleged incident AND the resulting claim happen during the period the policy is in force. Claims made policies provide coverage so long as the insured continues to pay premiums for the initial policy and any subsequent renewals. Each succeeding year the policy is continuously renewed, the “coverage period” is extended. Once premiums stop the coverage stops. Claims made to the insurance company after the coverage period ends will not be covered, even if the alleged incident occurred while the policy was in force. A Claims-made policy will cover claims after the coverage period ONLY if the insured purchases extended reporting period or “tail” coverage.