What is the difference between occurrence and claims-made malpractice policies?

The distinction between occurrence and claims-made policies is fundamental to understanding malpractice insurance. Nearly all legal malpractice policies in the United States are written on a claims-made basis, while occurrence policies are standard for general liability and property coverage. Understanding the difference helps you manage your coverage effectively.

An occurrence policy provides permanent coverage for any incident that occurs during the policy period. If you have an occurrence policy in effect during 2024 and an incident happens in November 2024, you can report a claim arising from that incident at any time in the future, even decades later, and the 2024 policy responds. There is no need for tail coverage or concern about reporting deadlines. The coverage is locked in by the date of the incident, not the date the claim is filed.

A claims-made policy, by contrast, is triggered by the date the claim is reported, not the date of the incident. For coverage to apply, the incident must have occurred after the policy's retroactive date, and the claim must be first made and reported during the active policy period. If you cancel or do not renew a claims-made policy, your right to report new claims ends, making tail coverage necessary to preserve protection for past work.

Claims-made policies dominate the legal malpractice market because they give carriers more precise control over their exposure. With occurrence policies, a carrier cannot close its books on a policy year until all potential claims from that year have been resolved, which may take decades. Claims-made policies allow carriers to limit their exposure to claims reported within a defined window. For attorneys, this means understanding the claims-made mechanism, maintaining continuous coverage, and planning for tail coverage at retirement or career changes is essential to avoiding gaps in protection.