What does the claims-made basis for insurance refer to?

The claims-made basis for insurance specifically refers to the timing of when claims are submitted for coverage. Under this structure, claims are paid based on when the claim is reported, rather than when the service that generated the claim occurred. This means that for a claim to be eligible for coverage, it must be made while the policy is in effect.

This type of coverage is particularly relevant in professions prone to lawsuits, such as healthcare and legal services, where the timing of claims can significantly impact liability. Often, claims-made policies will include provisions to ensure coverage for claims that arise from services provided during the period the insurance was active. Thus, if a claim is reported after the policy has lapsed or been terminated, even though the incident occurred within the coverage period, it may not be covered.

Other options do not accurately capture the essence of the claims-made basis. They either suggest coverage relates to service dates or imply indefinite or time-limited coverage, which does not convey the critical component that a claim must be reported while the policy is still active for it to be honored.