Originally Posted by Blackcat31:
There are two primary types of insurance policy forms: occurrence and claims-made.
Occurrence forms cover losses that happen during a given period of time (the policy term). The loss can be reported years later, but the key is when it happened.
A claims-made policy covers claims made during a given period of time. The loss may have happened many years in the past, but is reported during the current policy term.
As you can imagine, it is difficult to move from one type of form to the other. Occurrence forms are somewhat more valuable as they respond to claims years later.
A claims-made form has value, but no guarantee of continued insurablity, so if you are for some reason cancelled by an insurance company, you may not have coverage in the future for activities in the past. Some important aspects of claims-made policies that you may need to know are: retrospective date, extended reporting periods, and tail coverage, to name a few.
The key concept here is that a claims-made policy generally costs less than an occurrence policy, but you run the risk of not being covered for a potential claim because you didn't discover it until after your policy expired. As with all other aspects of insurance, the decision is a gamble, and you pay a price to lower your risk.
Licensing in my state dictates the minimum insurance you can have which I think is a good thing because it forces home child care to purchase the insurance. This rule has been in effect for a long time. ...so much medical, occurrence, etc.
