What does it mean if your professional indemnity insurance works on a “claims made” basis ?

Some medical or dental professional indemnity insurance policies may work on what is commonly referred to as a “claims made” basis rather than a “claims incurred” or “occurrence” basis.  We can help you understand these terms better.

An “incurred/occurrence” based policy is a common type of insurance policy for categories like home insurance.  With these types of policies, the date of the “incident” (eg a fire) is key to determining whether an insurer, and which insurer, will respond. If you were insured with Insurer X, at the time of the incident, then you can lodge a claim with Insurer X, even if you do so at a later stage (within reason) when you are no longer insured with Insurer X.  This is also subject to the policy wording.

Claims “made” policies are more complicated to understand. Under a claims “made” policy, the date of the incident is not the key date for determining if you have cover and which insurer will respond. The important date is when the insured FIRST becomes aware of an actual or potential claim against them.  They must notify their insurer at the time they first become aware of the actual or potential claim.  Time is then of the essence to notify the insurer. If the insured is slow or late to notify, and the policy ends, or they change insurers, then the person will not be able to go back in time to register the claim – and they could be without cover.

This does not mean that you can’t change insurers with claims “made” type policies. You can.  Insurers offer a feature called “retroactive cover” to allow you to claim on past incidents, providing they were not known when cover first started with an insurer.  And there is also the ability to take “run off” cover, if you stop working, for claims when the insured only first became aware of the issue after the policy ends.

These are complex terms, and this is broad and generalised information. Each insurer will have unique policy wordings in this regard. Contact us to find out more.


General advice on this website has been prepared without taking into account your objectives, financial situation or needs. Before acting on the advice, consider its appropriateness. Always read the Product Disclosure Document of an insurer before considering whether to take a policy of insurance. General insurance services are provided by Experien General Insurance Services Pty Ltd ABN 77 151 269 279 AFS Licence No. 430190 (EGIS) trading as Experien Insurance Services. EGIS arranges insurance and is not an insurer