LITIGATION
Traps for the Unwary: Reporting Claims Under Liability Insurance Policies By PETER S. SELVIN
C
ompanies reporting liability insurance claims need to be aware that the pertinent rules vary depending on whether a policy is “claims made and reported” or “occurrence.” Most, if not all, Directors and Officers and Errors and Omissions policies are written on a claimsmade and reported basis. By contrast, Commercial General Insurance, or
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CGL insurance, is written on an occurrence basis. Under a claims made and reported policy, a claim must have arisen and been reported during the same policy period. By contrast, under an occurrence policy, the claim may be reported long after the expiration of the policy that gives rise to coverage. The most common mishap in the claims made and reported area is the
DECEMBER 2023
failure to recognize a communication as constituting a “claim”. While a “claim” may often be thought of as being synonymous with a lawsuit, many claims made and reported policies define “claim” to include “a demand for monetary or nonmonetary relief.” Thus, a demand letter that seeks recovery of damages, or which proposes a settlement, may well BACK TO CONTENTS
