CertainCert Insurance Certificate Management Blog

Professional Liability Insurance Tracking - Claims Made Concerns

  

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Occurrence coverage is the norm for general liability insurance policies today. Subject to the terms and conditions of the insurance policy, coverage will respond to any incidents that occurred during the policy period regardless of when the claim is reported. In general, coverage specifically for prior acts is not needed because it is already covered as the date of the occurrence is the trigger for the coverage not the date of the work or act. Likewise, with some exceptions, tail coverage is not necessary because coverage exists for occurrences during the policy period regardless of the date the claim is reported. While these are generally true, care must still be taken because select insurers endeavor to limit their risk by adding prior loss exclusions and sunset clauses to select general liability policies.

Unlike general liability insurance, claims made coverage is the norm for professional liability policies. Claims made coverage is subject to two essential coverage triggers: (1) the date of the occurrence, and (2) the date the claim was made. Claims made policies will only respond to claims first made during the policy period provided the loss or damage first occurred after the retroactive date. Unsophisticated or budget conscious professional may purchase professional liability coverage with a retroactive date equal to the inception date of the policy. Unless they purchased tail coverage on their prior policies, these professionals have purchased coverage that does not cover their past work. The only coverage they have is for incidents which first occurred and were reported during the policy period.

Insurance Requirements

Unfortunately, there are no standard insurance certificate forms for professional liability insurance coverage so your insurance requirements are your main line of defense. It is essential that you review your professional liability insurance coverage requirements with a qualified attorney and insurance professional to address your claims made coverage concerns. Your requirements should specify several things: (1) retroactive date must predate the work being done for you, (2) coverage must remain continuous through the work being done for you, (3) coverage must remain in force for a period of time beyond completion of the work, and (4) the retroactive date on future policies must predate the work being done for you.

Insurance Certificate Tracking

Because there are no standard insurance certificate forms for professional liability you may be best served by requesting and reviewing a complete copy of the insurance policy. Whether that is practical or not, it is essesntial that you require that any insurance certificate or other evidence of insurance being provided should clearly show:

1. claims made or occurrence coverage
2. retroactive date, if applicable
3. tail coverage period, if applicable