Either "Loss Occurring" or "claims made" cover

With Public Liability Insurances, we normally arrange what we call a “loss occurring” type policy. This means you are covered by the policy that was in force when an event actually occurred.

However, it is possible to have Public and Products Liability policy with what we call “claims made” coverage. This means that a current policy responds when a claim is made against you, even though the event causing the loss could have occurred well before that current cover started. A retroactive date is used, and it is the activities carried out after this date that is covered. This date remains the same as you renew.  

The trouble with Claims Made covers is that if you let cover lapse, then there is absolutely no cover for anything after that expiry date. Further if you let cover lapse and then take it up later, the new cover then will start again with a new retroactive date from inception of this new policy. So you will have no cover prior to that new retroactive date.

Usually there is no real problem if you go from a Loss Occurring wording to a Claims Made one but going back to loss occurring will leave you exposed for those years you held a claims made policy. You would need to buy run off cover.

Normally if someone closes their business, they have to continue protection by reverting to run off cover. In the first year it is usually the same price as the year before, but it runs off all those past exposures.

That does not mean "Loss Occurring policies" are not immune to claims being made against you well after you have closed a business and let these policies lapse.

An example could be an electrician wiring up a home. The faulty workmanship may not occur until a few years later as there was nothing to trigger an issue. Faulty wiring may have eventually led to a House Fire. But the event may have actually occurred well after the electrician had decided to retire leaving them potentially exposed to an uninsured claim.

It all depends what type of business you are in and also how the insurer may want to cover it. Though an Insurance Broker will seek to negotiate the right coverage for you.

To discuss any of these issues, talk to CPR - Experts who will save you.

A Claims Made Liability Wording

A Loss Occurring Liability Wording

Latest News

CPR Insurance Services Awarded Authorised Representative Insurance Business of the Year for 2019

Mandy and Robert Cooper were proud to receive the inaugural Authorised Representative Business of the Year from ANZIIF in the Australian Insurance Industry Awards for 2019.

We share this award with all our staff, Lauren, Guy and Sarah and thank them for their dedication in providing the best possible customer service. We also thank our clients who have made our business what it is today. We thank you all so much.

read more

Finalist in the Insurance Industry Awards

We were pleased to be advised this week that we are a finalist in the Australian Insurance Industry Awards in the category of Most Outstanding Authorised Representative Business for 2019.

Our company very much appreciates the accolade and just being nominated is prestigious to us. The awards ceremony is in August and we will see how we go, but being in the Top 4 is a credit to our team who have worked tremendously hard in the last eight years.

read more