Occurrence-Based Insurance Policy

Occurrence-Based Insurance Policy Occurrence-based insurance is a type of policy that pays for losses that occur during the policy period, even if it’s no longer active when you file a claim. An occurrence-based policy covers losses that happen during the time you have the policy, regardless of when you file a claim. It is designed to protect you against long-tail events incidents that could cause injury or damage years after they occur. For example, a chemical spill is a long-tail event because it often takes decades to produce visible injuries or disease. Occurrence-based policies will protect you against such events even if: -Many years pass before injuries or damages become known. -You have switched to another insurance policy or insurer. -You have canceled your insurance and not replaced it with another one. Common occurrence-based insurance policies; Insurers typically use occurrence-based policy forms for general liability, umbrella liability, and commercial auto insurance How Do Occurrence-Based Policies Compare With Claims-Made Policies? With an occurrence-based policy, insurers will compensate you for losses that happen during the policy period, even if it is no longer active when you submit a claim. As long as you maintained your coverage with no breaks, your current claims-made insurance policy can typically pay for losses from insurable incidents that occurred under previous claims-made policies with different insurers. What are the advantages of an occurrence insurance policy? -Occurrence-based policies have fixed costs. -They offer longer protection. -They’re simpler to manage. What are the disadvantages of occurrence-based policies? -Occurrence-based policies cost more. -They can be riskier to buy. -They can complicate your purchase decision. #BeNewinsurance #InsurTech #inclusiveinsurance #insurance #reinsurance #takaful #climatechange