Professional Liability Insurance Coverage Triggers Course Outline

1. Introduction and Overview
2. Coverage Triggers: What Are They and How Do They Apply?
   1. What is a "Coverage Trigger?"
      1. Claims-Made Coverage Triggers: A Thumbnail Sketch
      2. Occurrence Coverage Triggers: A Thumbnail Sketch
   2. How Claims-Made Coverage Triggers Operate: A Claim Scenario
      1. Potential Complications
3. The Two Types of Claims-Made Coverage Triggers
   1. "Pure" Claims-Made Policies
   2. Claims-Made and Reported Policies
      1. Why Claims-Made and Reported Policies were Developed
      2. Reporting Requirements in Claims-Made Policies
      3. Post-Policy Reporting Windows
   3. Claims "First Made" Language
   4. "First Made" Language: Two Key Implications
4. Retroactive Dates in Claims-Made Policies
   1. The Purpose of Retroactive Dates
      1. Not All Policies Contain Retro Dates
      2. A Retroactive Date Alternative: Excluding Coverage for a Specific Event
5. Applying Claims-Made Coverage Triggers
   1. Conditions Precedent to Triggering Coverage
      1. Applying the Conditions to a Claim Example
   2. Coverage Application under the Medical Malpractice Example
      1. Coverage Applies Under the 1/1/09–10 Policy
      2. Retroactive Date Requirement Satisfied Under the 1/1/09–10 Policy
      3. Reporting Requirement Satisfied Under the 1/1/09–10 Policy
   3. Discovery Provisions: The Option To Report "Potential Claims"
      1. What is an "Incident" or "Potential Claim"?
      2. Using Discovery Provisions To Prevent Coverage Gaps
      3. The "Specificity" Requirement
      4. Advantageous Uses of Discovery Provisions
      5. Catch-22 Aspects of Discovery Provisions: To "Laundry List" or Not
      6. When "Laundry Listing" Is Advantageous for the Insured
      7. When "Laundry Lists" Are Rejected
6. Complicating Factors in Applying Claims-Made Coverage
   1. When Is a Claim Made?
      1. "Claim" Is Notification of a Potential Claim
      2. "Claim" Is a Written Demand for Money or Services
      3. "Claim" Is Notification of a "Civil," "Criminal," "Administrative," "Alternative Dispute Resolution Proceeding," or "EEOC Proceeding"
      4. "Claim" is an Investigation by a Government Agency or Regulatory Body
      5. When Is a Claim Made? Some Examples
   2. When Does the Wrongful Act Take Place?
      1. When a Wrongful Act Takes Place: The General Rule
      2. Determining the Time of a Wrongful Act: A Case Study
7. Causes of Potential Claims-Made Coverage Gaps
   1. Retroactive Date Advancement
   2. Cancellation or Nonrenewal by the Insurer or Insured
8. Closing Coverage Gaps in Claims-Made Policies
   1. Extended Reporting Periods
      1. Using an Extended Reporting Period to Close Coverage Gaps
      2. Important Extended Reporting Period Terms
      3. Implications of ERP Coverage Terms and Premiums
      4. Runoff Provisions
   2. Prior Acts Coverage
      1. Key Definitions
      2. Alternatives to Full Prior Acts Coverage
      3. Why Prior Acts Coverage Is Frequently Available
      4. Why Prior Acts Coverage Is Not Always Available
9. The Rationale for Claims-Made Insurance
   1. Increased Predictability of Claim Liabilities
      1. Time Lags in Making Claims
      2. The IBNR Problem: Claims-Made versus Occurrence Reserving
      3. The Inflation Problem
      4. Summary
   2. Ease in Determining the Responsible Insurer
      1. Complications from Occurrence Triggers: A Case Study
10. Advantages and Disadvantages of Claims-Made Forms
    1. The Insurer's Perspective: Pros
       1. Marketing
       2. Retention of Insureds
    2. The Insurer's Perspective: Cons
       1. Public Relations Problems
       2. Exposure to Claims from a Number of Years when Writing Prior Acts Coverage
    3. The Insured's Perspective: Pros
       1. Lower Premium
       2. Stable Market for Coverage
       3. Coverage for Prior Acts
       4. Insurer Solvency
       5. Appropriate Limits
    4. The Insured's Perspective: Cons
       1. Lack of Continuity Assurance
       2. Difficulty in Changing Insurers
       3. Coverage Needed after Retirement
11. How Occurrence Coverage Triggers Operate
    1. What is an Occurrence Coverage Trigger?
    2. Occurrence Trigger Application
    3. Advantages and Disadvantages of Occurrence Policies
    4. The Insurer's Perspective: Pros
       1. Underwriting Ease
       2. Public Relations
       3. Competitive Advantage
    5. The Insurer's Perspective: Cons
       1. Long-Run Pricing Problems
       2. Problems in Determining the Responsible Insurer
    6. The Insured's Perspective: Pros
       1. Guaranteed Continuity
       2. Availability of Higher Limits in Multi-claim/Multi-Year Situations
       3. Greater Freedom of Choice
    7. The Insured's Perspective: Cons
       1. Insurance Policy Retention
       2. Potentially Inadequate Limits
       3. No Coverage for Prior ActsGreater Insurer Solvency Risk