Claims Made v. Occurrence Policies

“Claims Made” policy: coverage is effective only if the negligent harm is discovered and reported within the policy term.

“Occurrence” policy: coverage is effective if the negligent harm occurs within the policy period, regardless of the date of discovery.

Livingston Parish School Board v. Fireman’s Fund American Insurance Co., 282 So.2d 478 (La.1973).

“One of the seminal statements on the subject of distinguishing claims-made from occurrence policies was:

With the development of a more complex society, it became more reasonable, particularly with respect to the activities of professionals, to insure against the making of claims, rather than the happening of occurrences, and “claims made” insurance developed to meet a need for professionals to insure against the making of a claim as the insured event, rather than having to struggle with traditional concepts and difficulties inherent in determining whether the “event” insured against was the commission of an act, error or omission or the date of discovery thereof or the date of injury caused thereby.

The major distinction between the “occurrence” policy and the “claims made” policy constitutes the difference between the peril insured. In the “occurrence” policy, the peril insured is the “occurrence” itself. Once the “occurrence” takes place, coverage attaches even though the claim may not be made for some time thereafter. While in the “claims made” policy, it is the making of the claim which is the event and peril being insured and, subject to policy language, regardless of when the occurrence took place. Sol Kroll, The Professional Liability Policy “Claims Made,” 13 Forum 842, 843 (1978).”

Anderson v. Ichinose, 760 So.2d 302 (La.1999). See also Hood v. Cotter, 5 So.3d 819 (La.2008).

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