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Claims Made
Unlike many other types of insurance policy Professional Indemnity and Directors and Officers insurance policies are “claims made”, as opposed to “claims occurring” like many other types of insurance.
This means that for a claim of negligence against you to be covered, your policy has to be in force at two points:
1) When the alleged act of wrongdoing/negligence occurred and;
2) When you report the claim (or when the “claim is made”).
These types of policies are mostly concerned past work or occurrences, as that’s where the majority of claims come from. You can’t be sued for an act not yet committed, and it can take months or even years for latent problems to become apparent.
Which brings us to a crucial point: your cover exists only for as long as your policy does.
For example, if you cancel your cover and three weeks later there’s a claim made against you, the claim will not be covered – even if it relates to acts carried out when the policy was in place.
If you want to make sure you’re still covered, you need to keep your insurance running. It could mean paying for cover years after you’ve ceased trading, retired or resigned.
