Basis of Liability Cover

Basis of Liability CoverLiability policies are offered in two forms and it is important to know the difference between these:

Occurrence coverage

This can be the preferable option for a business owner.  Cover is provided for a claim no matter when it occurs.  If the claim is reported today but the incident occurred several years previously, subject to certain conditions, the insurer should deal with the claim.  A good example is the mesothelioma claims which have been occurring recently when the ‘caused’ date (exposure to asbestos) is many years previously. Problems can arise when buying a business where the insurance cover has not been fully investigated and the insurance history has not been completely determined.  Claims can arise leaving the company with a liability that they did not expect and can ultimately cause the business to fail.

Claims made policies

Claims made policy will only react to claims made during the period of insurance.  After the insurance period, if the client does not pay the renewal, then cover ceases.  Some insurer especially providing life sciences insurance cover insist on claims made cover. To continue cover after the insurance period ends then tail cover (extended reporting period endorsement) can be requested. If you take out cover with another insurer having claims made cover then you must take out tail coverage.

We are happy to discuss your Liability Insurance queries with you – call us on 01707 883377 or email us on

Image courtesy of Stuart Miles /

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