Professional liability policies are claims made policies. Architects and engineers have professional liability policies a/k/a errors and omissions policies.
With a claims made policy, the claim (or error and omission or wrongful act) must be reported to the insurer within the policy’s period to trigger coverage.
Oftentimes, claims made policies have tail coverage that is an extended reporting period. The insured probably has to pay additional premium for tail coverage. With tail coverage (or an extended reporting period), however, a claim can be made to the insurer within the extended reporting period and still trigger coverage of the professional liability policy.
Additionally, claims made policies may contain a retroactive date that precludes the coverage of errors and omissions / wrongful acts prior to this retroactive date, even if the claim was made within the policy period.
CGL policies, on the other hand, are occurrence based policies meaning the occurrence (and not the claim) must occur within the policy’s period to trigger coverage. With a CGL policy, the claim can be made outside of the policy’s period as long as it relates to an occurrence with the policy’s period.
It is important to understand when a professional liability versus a CGL policy applies along with when a claim triggers potential coverage under the applicable policy.
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