Occurrence Policy

An occurrence policy is a type of insurance policy that covers claims made against the policyholder for events that occur during the policy period. The policy will pay for damages up to the policy limits, regardless of how many claims are made.

Occurrence policies are often used for professional liability insurance, which protects professionals from claims made by their clients for errors or omissions in their work. For example, an attorney who is sued for malpractice would be covered by an occurrence policy if the alleged malpractice occurred during the policy period.

Occurrence policies are also used for commercial general liability insurance, which protects businesses from claims made by third parties for bodily injury or property damage. For example, a business that is sued for negligence after a customer is injured on its premises would be covered by a commercial general liability occurrence policy if the accident occurred during the policy period.

There are a few key advantages to using an occurrence policy. First, occurrence policies provide broad coverage for claims that are made during the policy period. This is important for professionals and businesses that are at risk of being sued for errors or omissions in their work. Second, occurrence policies do not have a per-claim limit, which means that the policyholder can be reimbursed for damages up to the policy limits regardless of how many claims are made. This can be a significant advantage for businesses that are at risk of being sued for multiple claims.

However, there are also a few disadvantages to using an occurrence policy. First, occurrence policies can be more expensive than other types of insurance policies. Second, occurrence policies do not provide coverage for claims that are made after the policy period has expired. This is important for businesses and professionals that want to ensure that they have coverage for claims that are made in the future.

Overall, occurrence policies can be a good option for professionals and businesses that are at risk of being sued for errors or omissions in their work. However, it is important to weigh the advantages and disadvantages of occurrence policies before making a decision about whether or not to purchase one.