'Claims Made'

What does 'Claims Made' mean?

'Claims Made' is a term used to describe an insurance policy which provides cover for claims which are only notified during the term of the policy.

This is not necessarily the same time period when the actual incident or error causing the claim, occurred. 

Professional indemnity policies provide a 'claims made' basis of cover because professional errors in construction, accounting, legal etc are often only discovered weeks, months or even years after the error was made.

Here's a simple example. If you made a costly mistake for a client in 2015 but your client does not discover their loss until 2020, it is your 2020 policy and insurer that deals with the ensuing negligence claim against you. Therefore a valid professional indemnity policy or 'run-off' policy must remain in force at all times for a claim to be met by an insurer. 

Please also bear in mind that if you change your limit of indemnity, it is the the limit purchased when the claim is notified that applies, not the limit purchased when the work was actually carried out.  

For more information on this subject or to talk to one of our experts, please call 0345 251 4000.