What’s Claims Made Liability Insurance

NY State requires the following disclosure on claims made insurance policies – Not a bad description of the issues:
In consideration of the premium charged:
1  This is a “claims-made” policy which means, generally, that coverage applies under this policy for only those claims first made against the Insured during the policy period.
2  This policy provides no coverage for claims arising out of incidents, occurrences or alleged wrongful acts which took place prior to the retroactive date, if any, stated in the policy.
3  This Policy covers only claims actually made against the Insured while the policy remains in effect and all coverage under the Policy ceases upon the termination of the policy, except for any automatic discovery period coverage that may be available,  unless the Insured purchases additional discovery period coverage available pursuant to the provisions of the policy.
4  During the first several years of being covered under a “claims-made” policy, claims-made premium rates are comparatively lower than rates on other types of policies. You can expect substantial annual premium increases, independent of overall rate level increases, until the claims-made relationship reaches maturity.
All other terms, conditions and limitations of this policy shall remain unchanged.