“Claims made” coverage forms were created with a simple goal: the insurer paid the claims that were made during the policy period. Since the wrongful acts or errors of professionals (i.e. doctors, lawyers, insurance agents, etc.) do not result in immediate injury or damage, the “claims made” policy was developed to limit the number of policies involved to the one policy in effect when the claim is actually brought.
Court rulings, underwriting decisions and misapplication of the “claims made” form’s use have combined to push the form far from its simplistic roots. Now a myriad of forms, conditions and limitations make the modern “claims made” coverage far more complicated than was intended.
Today MyNewMarkets.com begins a five-part series on the creation of the modern “claims made” coverage form. With the “why,” the “what” is easily understood. This series develops the “why” and explains the “what” of “claims made” coverage.