Which type of insurance provides coverage while the policy is active for any claims made?

Claims-made insurance is designed to provide coverage for claims that are made during the policy period, as long as the event that led to the claim occurred after the policy's retroactive date. This type of insurance is particularly important in professions where claims may arise long after the actual service was provided, such as in the fields of healthcare or professional services.

The distinguishing feature of claims-made insurance is that it only covers claims reported while the policy is in effect, making it crucial for insured parties to maintain continuous coverage to ensure that any potential claims can be addressed. If a policy lapses, any claims arising from incidents that occurred during the coverage period would not be covered if reported after the policy's expiration.

This specific structure encourages professionals to keep their liabilities covered in a timely manner and helps promote responsible management of claims. Understanding the nuances of claims-made policies assists individuals in selecting the right insurance for their needs and recognizes the importance of maintaining an active policy.