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claims-made coverage trigger

A type of coverage trigger that obligates an insurer to defend and/or pay a claim on an insured's behalf, if the claim is first made against the insured during the period in which the policy is in force. (The term "made" means notification to an insured that a demand for money or services is being requested.)

For example, assume that a policy containing a claims-made coverage trigger is written with a term of January 1, 2015-2016. Coverage will apply to claims made against the insured during this time period.

Claims-made coverage is in contrast to policies written with an occurrence trigger, whereby coverage applies to incidents occurring while the policy is in force—regardless of when the claim arising out of that incident is made against the insured. Thus, under an occurrence policy with a term of January 1, 2015-2016, coverage would apply to claims arising from incidents that occurred during the January 1, 2015-2016, period, irrespective of when the claims are made against the insured or reported to the insurer.

Although claims-made policies are most often used to write professional and directors and officers liability policy forms, they are occasionally found in commercial general liability (CGL) policies.

See also Claims-made policy; Claims-made and reported policy; Claims-made and reported provision; Coverage trigger; Occurrence policy.

Links for IRMI Online Subscribers Only: CLI II.C; CRM VI.A; PLI VIII.C; PracRisk, Topic G-32


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