Most professional liability policies are written on a “claims made and reported basis,” requiring claims to be made and reported during the applicable policy period.

Simple right? Not so fast. Insureds need to remember several extremely important components that must be satisfied to ensure coverage.

Ensure coverage

First, the obvious. Claims must be made against the insured during the policy period, which typically runs for one year. For example, if the policy period is listed from January 2, 2016 to January 2, 2017, a claim would need to be made during those effective dates. If the claim was made prior to January 2, 2016, for instance on January 1, 2016, it quite simply would not be covered under the policy. Similarly, if a claim is made after the policy period, for instance January 3, 2017, it also would not be covered because the claim would fall outside the policy period.

Second, all claims must be reported to the professional liability insurance carrier within the same policy period in which it is made, subject to specific exceptions. Using the example above, if a claim is reported to the carrier on January 3, 2017 (after the policy’s expiration date of January 2, 2017), the claim would not be covered due to late reporting.