Claims-Made vs. Occurrence-Based Malpractice Insurance: Which One Fits Your Practice?
Summary Highlights:
- Claims-made insurance only covers claims filed while the policy is active
- Occurrence-based insurance covers claims from any incident during the policy term, even if filed later
- Claims-made policies require tail coverage for post-policy protection
- Choosing the right policy depends on your career timeline and risk exposure
What Are Claims-Made and Occurrence-Based Policies?
As a licensed medical insurance broker at InsureGen Brokers, we frequently walk healthcare professionals through one of the most important malpractice coverage decisions: claims-made and occurrence-based policies. This choice can impact your long-term protection, premium costs, and how you’re covered if a lawsuit is filed after your policy ends. Understanding the distinction is critical to protecting your practice and financial future.
Claims-Made Insurance
A claims-made policy provides coverage only if the incident and the resulting claim occur while the policy is active. If a claim is filed after your policy has lapsed or you’ve changed insurers—even if the incident happened during your coverage period—you won’t be protected unless you’ve purchased tail coverage (also known as an extended reporting endorsement).
Tail coverage is essential if you’re retiring, switching insurers, or leaving private practice, as it continues to protect you from late-arriving claims tied to previous work. Without tail coverage, a delayed claim could expose you to legal fees, settlements, and reputational damage.
This type of policy often has a lower initial premium, making it a popular option for early-career professionals. However, premiums typically increase over time as your risk profile matures and as more years of exposure accumulate.
Occurrence-Based Insurance
In contrast, an occurrence-based policy covers any incident during the policy period, regardless of when the claim is filed, even if it’s years later and your policy is no longer active.
Let’s say you performed a procedure in 2023 while your occurrence-based policy was in force, but a patient doesn’t file a lawsuit until 2026. As long as the procedure occurred during your coverage window, you’re fully protected—no tail coverage is required.
This policy type is more comprehensive and convenient, especially for long-term peace of mind. While occurrence-based policies often come with higher premiums upfront, they remove the hassle and cost of purchasing tail coverage down the road.
What Are the Advantages and Disadvantages of Each?
Claims-Made:
Pros: Lower initial premiums; more flexibility when switching jobs
Cons: Requires tail coverage; gaps in protection if you cancel prematurely
Occurrence-Based:
Pros: No tail coverage needed; easy to understand
Cons: Higher premiums from the start; not always available for all specialties
At InsureGen Brokers, our role as your agent for professional liability insurance is to help you understand how each policy type aligns with your risk tolerance, budget, and career trajectory. We’ll compare options from A-rated carriers, explain how coverage applies in real-world scenarios, and ensure you’re protected—now and in the future.
When Should You Choose One Over the Other?
If you’re just starting and need to keep premiums low, a claims-made policy might make sense, as long as you’re prepared to buy tail coverage later. If you’re more established or nearing retirement, an occurrence-based policy provides long-term stability and fewer post-policy worries.
For example, many solo practitioners in private practice opt for occurrence-based coverage, while physicians employed by large groups often use claims-made insurance provided by their employer. Either way, our team at InsureGen Brokers can help you assess what aligns best with your career goals.
How Can InsureGen Brokers Help You Choose the Right Policy?
At InsureGen Brokers, we understand that selecting malpractice insurance is more than just picking a price—it’s about safeguarding your professional future. As your dedicated insurance partner, we do more than offer quotes. We help you make informed decisions that align with your career stage, specialty, and legal obligations.
Here’s how we support you:
- We explain how your policy structure—whether claims-made or occurrence-based—affects your ability to file or defend a claim.
- We compare premiums, policy limits, and benefits across top A-rated liability carriers, so you don’t overpay for inadequate protection.
- We recommend tail or retroactive coverage when appropriate, particularly if you’re changing insurers, moving states, or nearing retirement.
- We tailor your policy to match the specific risks and settings of your practice—whether you’re a solo provider, part of a group, or offering telehealth services.
Just like with insurance for mental health professionals and counselors, where therapy-specific exposures like confidentiality breaches or crisis response can create legal risks, your field may carry unique vulnerabilities that require specialized protection. That’s why we don’t believe in cookie-cutter solutions.
Call InsureGen Brokers today at 480-590-3820 for a free consultation. Let us help you find malpractice insurance that fits your practice, budget, and future.
FAQs for Professional Liability Insurance
What is professional liability insurance?
Professional liability insurance, also known as errors and omissions (E&O) insurance, protects professionals from claims of negligence, errors, or omissions in the services they provide. It covers legal fees, settlements, and judgments, ensuring financial protection for professionals.
Who needs professional liability insurance?
Professionals in industries such as healthcare, law, consulting, education, engineering, and more can benefit from professional liability insurance. In some fields, like medicine or counseling, it may even be a legal or licensing requirement.
Is professional liability insurance mandatory?
Requirements vary by profession. For example, medical practitioners, lawyers, and counselors often need this insurance to meet regulatory or licensing standards. It’s essential to check with your licensing board or employer to confirm if coverage is required.
How much does professional liability insurance cost?
The cost depends on factors like your profession, the level of risk, coverage limits, and claims history. Policies can be customized to fit your budget and specific professional needs.
What does professional liability insurance cover?
This insurance covers claims related to negligence, errors, omissions, or failure to deliver promised services. It typically includes legal defense costs, settlements, and damages.
How is professional liability insurance different from general liability insurance?
Professional liability insurance addresses risks related to professional services, such as errors or negligence in your work, while general liability insurance protects against physical risks like bodily injury or property damage.
Can professional liability insurance be customized?
Yes, policies can be tailored to meet the unique needs of different professions, including educators, engineers, healthcare workers, consultants, and more. Customization ensures optimal coverage for specific risks.
Does professional liability insurance include cyber liability coverage?
Some policies offer cyber liability coverage, especially for industries handling sensitive data, like healthcare or finance. Discussing your specific requirements with your insurance provider ensures proper protection.
What should I consider when choosing a professional liability policy?
Key considerations include your industry’s risk level, coverage limits, exclusions, and the insurance provider’s reputation. Working with an experienced broker can help you find a policy that aligns with your professional needs.
Why Trust InsureGen?
InsureGen, based in Scottsdale, Arizona, is a family-owned agency specializing in professional liability insurance solutions tailored for healthcare providers, medspas, and medical facilities. With over five generations of experience in the insurance industry, InsureGen is committed to helping businesses navigate the complexities of liability coverage. From hospice care liability insurance to medspa malpractice insurance and healthcare facility professional liability insurance, InsureGen offers comprehensive protection that ensures businesses remain compliant, secure, and financially safeguarded.
At InsureGen, we take a personalized approach, working closely with each client to understand their unique needs and provide tailored insurance solutions. Our relationships with top-rated insurance carriers allow us to compare policies and offer cost-effective coverage while minimizing risks. Whether you’re seeking medical facility liability insurance, medspa insurance coverage, or hospice liability insurance, InsureGen is your trusted partner in protecting your business. Call (480) 590-3820 or visit our Scottsdale Insurance Agency office.