What is the typical coverage period for claims-made policies?

For claims-made policies, the typical coverage period is indeed only during the coverage period. This means that in a claims-made policy, coverage is triggered when the claim is made, provided that the event which led to the claim occurred during the time that the policy was in effect. This characteristic distinguishes claims-made policies from occurrence policies, where coverage applies regardless of when the claim is made, as long as the incident occurred during the policy period.

Understanding this notion is crucial for policyholders, as it requires them to be attentive to the policy period and ensures they have the necessary coverage at the time a claim arises. Claims-made policies often have, as an additional feature, a retroactive date, which allows for coverage of claims that occur after this date but before the policy is cancelled. This is significant for professionals and businesses that may not realize that their coverage may cease to exist once the policy expires unless they secure extended reporting periods or similar adjustments.