Liability Insurance

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An occurrence-based malpractice cover, which comes under commercial general liability insurance, protects the policyholder from a covered incident that ‘occurs’ during the tenure of the policy, irrespective of the fact when the claim is filed. It means an occurrence-based policy will cover those claims as well which arise even when the policy had canceled or ceased to exist, so long as the event occurred when the coverage was active.

It means, in the case of occurrence-based malpractice insurance, the policy must be in active mode on the date when the event that causes losses arises.

Perhaps someone has made a malpractice claim after the policy is over. You might need to claim an event on your old policy. If you have occurrence-based insurance, you can still enjoy protection under the old policy. Some malpractice insurance policies do not cover their clients once they expire. However, if you have occurrence-based insurance policies, you can get coverage for some years. Usually, such policies offer coverage until the statute of limitations for a claim expires.


What you need to understand

It is crucial to understand that there are two types of malpractice insurance policies: claims-made and occurrence. In the case of claims-made, would give coverage only if the policy stays active both when the incident happened and when filed a lawsuit. It means the coverage must be extended for a significant duration in order to get sufficient protection. On the other hand, occurrence policies differ from claims-made policies in the way that they cover any claims for an event that took place during the policy coverage, even if the claim is reported after the policy ceases to exist. Occurrence policies cover ‘long-tail’ claims, i.e, those claims as well which arise after many years even when the policy has been expired.

Similarly, claims-made policies do not ‘restore’ limit as occurrence policies do. However, occurrence-based policies are costlier than claims-made coverage.

The optimum cover for occurrence-based malpractice insurance which you should have may base on your individual’s needs. Therefore, it is essential to confer with a corporate insurance advisor like SecureNow to determine the type of coverage. And amount for your particular situation. Moreover, you would only need to fill in a few basic details about your requirements. And SecureNow would generate multiple policy quotes which you can compare to find the one.

Read more: What is Commercial General Liability Insurance?


Ravish Sharma owned a hotel in Pune. One day, a customer named, Jayant came to his hotel, and unfortunately slipped and fell on the floor. When the waiter went to help him, Jayant said he was fine and did not need help. He left the hotel. After one month of the incident, Ravish sold the hotel.

However, nearly six months later, the new owner of Pune’s hotel received a legal notice from Jayant who sued the owner for the bodily injury. However, the accident took place when Ravish owned the hotel. Therefore, the new owner asked him to settle the case.

In this case, when Ravish was the owner of Pune’s hotel, he purchased commercial general liability insurance to get coverage against any loss or damage. That may happen at the hotel along with third-party liability. Here, Ravish approached the insurer, who was covering his Pune hotel, for the claim settlement. As Ravish had purchased an occurrence-based malpractice insurance policy, the insurer agreed to settle the claim as the event happened during the tenure of commercial general liability insurance.

Here it is interesting to note that even when Ravish sold his hotel, the policy was no longer active. The commercial general liability insurance company agreed to settle the claim, filed after months. If Ravish didn’t purchase occurrence-based malpractice insurance it would be a tough situation for him as he would have to compensate Jayant on his own.