Determining whether an occurrence-based or claims-made insurance product is better depends on several factors, including your business’s nature, risk profile, and budget. Occurrence-based policies cover incidents that occur during the policy period, regardless of when a claim is made.
This makes them more suitable for businesses with long-tail exposures, such as medical malpractice claims. Claims-made policies, on the other hand, cover claims made during the policy period, regardless of when the underlying incident occurred.
They are often less expensive than occurrence-based policies but may require the purchase of additional coverage, such as ERP coverage or tail coverage, to cover claims made after policy expiration. Claims-made policies are often preferred by businesses with lower risk profiles or those seeking to lower insurance costs.
Ultimately, it is important to consult a licensed insurance agent or broker who can assist in evaluating the benefits and drawbacks of each policy type and recommend the best coverage options for your business based on your specific needs and risk profile.