Is it possible to acquire a new General Liability Insurance policy for a Small Business which will cover work that your firm has already recently completed without coverage?

1. 

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   David G. Pipes, CLU®, RICP®

   Business Development Officer, T.D. McNeil Insurance Services, Fresno, California

   A liability claim has a time that it is discovered and the time that it occurs.  There are two basic forms of liability coverage, occurrence and claims-made.   If the claim has not been initiated, some insurer might assume the risk on a claims-made basis.  It is unlikely they will do that if they suspect a claim is coming.  On the very esoteric side, though, there are companies that insure after a known loss.  These policies are written for tax purposes.

   Answered on March 13, 2014

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   Terry A. McCarthy, CLU, ChFC

   President, Insurance Associates Agency Inc., West Chester, OH

   The vast bulk of general liability insurance coverage written for business is provided on an "occurrence" coverage form. The occurrence form of coverage is triggered by the "occurrence" of an event that causes a loss that is neither intended or expected on the part of the insured. If the event occurs during the policy period, it is covered without much limitation to when it is reported. On the other hand, another form of coverage is written for business that is referred to as a "claims made" form of coverage. Again, the trigger is the loss but now, rather than determining whether the loss occurred during the policy period, the question is when the claim first becomes known to the insured and when the claim is first made with the carrier. A claim on this form of coverage doesn't necessarily have to be made during the dates of the policy coverage for coverage to available for the loss. Claims made coverage is usually written for doctors, lawyers, insurance agents, and others where the advice and professional interpretation and expertise is the product covered. Claims made policies are designed to keep only the current policy term the only limit of liability exposed to loss. Occurrence policies have often had years and years of coverage limits stacked upon the other to create large pots of money to settle losses that may have occurred through many years. Language was added to occurrence policies to identify that a loss includes "continuous and repeated exposures to the same conditions" to help connect the chain of events in an accident to avoid having each event serve to be a separate loss.

   Answered on July 9, 2015

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