An informative teleconference on Claims-Made policies was recently hosted by Strafford.  Here are some take-away points. 

• Most claims-made policies require the insured to report an event that will likely give rise to a claim in the future.  If the reported event eventually evolves into a claim, the insurer will treat the claim as if it were first made during the policy period when the initial report was made.
• Ideally, the policy includes a "claims-made-and-reported form" allowing the insured an additional period of time after the policy period expires to report a claim first made during the policy period.
• An Incident Reporting Provision is different from a claim-reporting extension.  An "incident" must typically be reported in sufficient detail prior to the expiration of the policy.  Therefore, "claim" and "incident" are not synonymous.
• Although a claims-made policy may have an extended reporting period after the policy period, insurers may deny such benefits to a renewing policy holder who first reports a claim from a prior policy period when it is first reported during a renewed policy period.  
• Many claims-made policies require "Notice of Circumstances" as follows:  "If during the Policy Period an Insured shall become aware of any circumstances which may reasonably be expected to give rise to a Claim being made against an Insured and shall give notice to the Insurer of the circumstances, then a Claim which is subsequently made against such Insured and reported to the Insurer shall be considered made at the time such notice of such circumstances was given." 
• A "Notice of Circumstances" to the insurer should include: (1) the nature of the transaction or circumstance; (2) the names of the claimants; (3) the laws or regulations forming basis for alleged liability.
• The insured should take full advantage of a "Notice of Circumstances" provision to eliminate any doubt regarding requirements for giving notice of a claim.  Compliance with such a provision avoids risk of late notice.  Further, giving notice of circumstances avoids a potential misrepresentation in the renewal application. 
• Some claims-made policies have self-insured retention requirements.  Unless the policy specifies otherwise, all notice requirements apply to claims within the applicable retention period.  Defense-handling procedures within the retention may vary widely depending on the policy.  

   Thanks to the three panel members who led the teleconference: Frederick J. Fisher, E.L.M. Insurance Brokers, El Sugundo, Calif.; Anthony Bartell, McCarter & English, Newark, N.J.; and David S. White, Thompson & Knight, Dallas, Tx.