A liability insurance policy that is triggered at the time a claim is paid,
rather than at the time a claim is first reported (claims-made policy) or at
the time the injury or damage occurs (occurrence policy). This approach can
offer significant benefits in terms of pricing accuracy. However, since claims
will be paid only while the policy remains active, the insured facing a claim
cannot cancel the policy while the claim is pending, often for years, unless
he or she is willing to pay the claim out of personal assets.
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