Occurrence vs. Claims Made

Buyer Beware

Buy smart. Be aware. Be careful.

Having information about the professional liability insurance you are buying is now more critical than ever. What you assume you are buying may be dramatically different from what you are actually getting. What you don't know about the insurance policy you are buying could lead to dire financial consequences. As most professionals know, the possibility of lawsuits is simply too great to avoid carrying quality coverage.

There are several insurance products available and we wanted to take a moment to ensure that you are aware of the advantages of the Natural Health Practitioners of Canada (NHPC)'s sponsored insurance program. If you have questions about professional liability insurance, or if an alternate provider has approached you, please read this article.

There are two primary types of professional liability insurance forms: occurrence and claims-made.

NHPC insurance policy is on an occurrence form

An occurrence form covers losses that happen during the policy period, regardless of when the claim is made. The loss can be reported years later, but the key is when it happened. This means that even if you cancel or non-renew your liability insurance policy, coverage will always be there for incidents that took place during the policy period you carried this coverage. For example, a client felt a slight pain while you giving them a massage but fails to mention anything to you. Six months later the client sues you as the pain has increased substantially. The policy that would respond is the one which was in force at the time the original "incident" took place six months earlier. Even if you no longer purchase coverage because you retired, change careers or are now covered through your employer, the policy you had through NHPC remains in place for all incidents that occurred during that timeframe. When an occurrence policy expires, the premiums stop but the coverage continues.

Claims made policy form

A claims-made policy covers claims that occur, are made against you and reported during the policy period. The incident must take place after you purchase coverage. Using the same example as above, a client felt a slight pain while you were giving them a massage but fails to mention anything to you. Six months later your policy expired and you no longer purchase coverage because you retired, changed careers or for any other reason. The claims made policy would not respond as it is no longer in place. When a claims made policy expires or is not renewed, all coverage ceases as well.