We’ve previously discussed Why Your Business Needs Commercial Insurance and want to continue. Your business needs the best protection available. We’ll show you what the difference is between claims made versus occurrence policies.
What is Occurrence Commercial Insurance?
An occurrence policy covers a claim due to an injury or damage while the policy is in place, not matter when the claim is first made. For example, say a customer falls in your place of business on December 31, 2019. However, they don’t file for damages until 2020. Your business is still covered under an occurrence policy.
What is Claims Made Commercial Insurance?
Claims made insurance covers the claims that occur due to an injury or damage that occurs during and is claimed within the policy period. Any claim from these events that occurs or is reported outside the policy period will not be covered. However, there is optional special coverage to cover you in this case. Why would you need it? At times, claimants can wait to report an issue. Other times data must be gathered regarding the claim before it can be filed. In short, a number of reasons exist for claims to happen outside the coverage period.
Special coverage commercial insurance comes in two types:
- Prior acts insurance covers claims that occur from injury or damage that happens before the policy period, but told to the insurer after the policy begins.
- Run-off commercial insurance pertains to claims made after the policy has expired. It usually allows 30 to 60 days after the expiration of the policy to file a claim. Run-off coverage begins when the one to two month period ends but costs an additional premium.
Which Commercial Insurance Should I Get?
The type of business you run will dictate the type of coverage you need. You may contact your existing insurance company for answers to your questions. Those of you who live in Harris County, as we do, may contact The Charles Osburn Insurance Agency. They are experts in helping you select a new insurance agency, shop around, and answer your questions.
Claims Made Vs. Occurrence Commercial Insurance, Bookkeeping, Taxes, & More
Remember that each state has its own rules for claims made vs. occurrence. As a result, it is useful to have an agent on your side. It is also useful to have a bookkeeper when you have questions on how to write off your commercial insurance costs. Feel free to contact us if you work in the area and need help doing so.
