Business Insurance
Claims-Made Policy
Claims-made policies tie coverage to when a claim is reported rather than when the incident happened, making continuous coverage and retroactive dates critically important.
Last reviewed: May 2026 · Editorial methodology
Definition
A claims-made policy provides coverage only when the claim is both made against the insured and reported to the insurer during the active policy period (or within an applicable extended reporting period). Professional liability, D&O, EPLI, and cyber insurance are most commonly written on a claims-made basis because the gap between a professional mistake and a resulting lawsuit can be years. This creates a unique risk: if a business cancels its claims-made policy without purchasing tail coverage, incidents that occurred during the prior policy period but are claimed afterward are uninsured. Claims-made policies often cost less in their first year of issuance (step or first-year rating) because the insurer's exposure is small, increasing over several years as the retroactive date moves further into the past. When comparing renewals, the retroactive date must be maintained — a policy with a retroactive date of January 1, 2019 that lapses and restarts in 2026 would begin with a 2026 retroactive date, eliminating seven years of prior coverage. Nose coverage (prior acts) offered by a new insurer can replicate an old retroactive date, but it is typically expensive.
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Cover Forge USA Editorial Team
Editorial Lead
This article was researched and written by the Cover Forge USA editorial team against federal sources (NAIC, CMS, FEMA, DOL, SSA, state DOIs) and standard policy forms. Bylines organize content by topic — they do not assert individual licensure. See our editorial-policy for details.
Reviewed 2026-06-14
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