Of particular importance in distinguishing professional from other types of liability, is the type of form it is written on. Conventional liability policies are written on what is known as an "occurrence form". An occurrence form responds to claims based upon when the claim actually occurred, regardless of when the claim is actually brought against you. As long as the claims occurs during the period when the policy was actually in force, the policy will respond, regardless of whether or not it is still in force or not.
Claims-Made policies by contrast, respond to claims based upon when the claim is first made upon the insured. Particular to this type of form is the date upon which continuous and uninterrupted coverage was first put in place. This date is commonly known as the "retroactive date" or “prior acts” date. As long as a policy was in force and remained continuous, a claim for a “prior act” may be brought and answered by the policy that is in force at the time that the claim is made against the insured.
Normally, if you renew your coverage with the same carrier without interruption, there is no gap in coverage. However; should you decide to move to another professional liability carrier, you must obtain an “extended reporting form” endorsement (Often known as “tail” coverage ) from the carrier or purchase a policy with “prior acts” coverage. Normally, a carrier will honor the prior retroactive date provided that there is no difference in the coverage provided and as long as there is no gap in coverage.
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