A claims – made policy is a type of liability insurance policy that is triggered when acclaim is first reported to the insurer. This means that coverage applies only to claims made during the policy period, regardless of when the underlying event causing the claim occurred. The policy may also have
a retroactive date , which limits coverage to claims made after that date.
EXAMPLE:
A lawyer purchases a professional liability policy with a retroactive date of January 1, 2020, and a policy period of January 1, 2023, to December 31, 2023. If a client files a claim against the lawyer for services provided in 2019 but the claim is reported during the policy period and the lawyer had no prior knowledge of the claim, it would be covered under the policy.