All-Claims Form - Retroactive Date

All-Claims Form - Retroactive Date

by Raymer Berlanga -
Number of replies: 5

Professor Bradburn:

I am struggling a little bit grasping the concept of All-Claims Form and particularly, the Retroactive Date. Can you elaborate a little bit more on it? Perhaps explain it a little bit by tackling this question from the Lesson?

Assume, for each of the following: an insured had calendar year policies: occurrence policies in 2000 and 2001, claims-made policies in 2002 and 2003; the 2002 claims-made policy contained no retroactive date; the 2003 policy had a retroactive date of 1-1-02. The insured retired from business and did not renew or replace the 2003 policy. If there is a BI or PD from a covered occurrence, which policy or policies (if any) apply for; "Insured sold product which caused injury in 2000, it injured claimant in 2001, claimant first made claim against insured in 2002?"

Also, should I be asking through the social break room forum, or is there another place for questions specifically related to the Lessons?

Thank you in advance,

 

In reply to Raymer Berlanga

Re: All-Claims Form - Retroactive Date

by Jan Bradburn- -

Raymer, 

The CGL has two coverage forms.  They are the occurrence and claims-made forms.  

The occurrence form coverage is the simpler of the two. Most property and casualty insurance policies fall into this category. Quite simply, "occurrence" form coverage means that the policy responds to events that occur during the policy period regardless of when the claim is made. Once the policy period is over, the policy will respond to covered claims, even if the claim is made many years after the triggering event (accident, wrongful act, injury, etc.).

The far more complex "claims-made" coverage form responds only to claims that are made during the policy period, though the triggering event may occur prior to the policy period if there is a "retroactive date" on the policy. The key to "claims-made" policies is maintaining continuous coverage. Without "continuity," insurers will not give you retroactive coverage.

Claims-made" coverage seeks to contain the volatile nature of the "tail." In property and casualty insurance lingo the "tail" refers  to the typical length of time between the triggering event and the claim. Asbestos claims, which often takes years to develop, is considered a "long tail" exposure. Libel and slander lawsuits, on the other hand, usually occur right after the triggering event.

I hope this helps.  You can post questions on the Forum or you can email me directly at bradburn@oltraining.com.  Either way, I always try to answer within 24 hours.  Please let me know if you have other questions.

Jan

In reply to Raymer Berlanga

Re: All-Claims Form - Retroactive Date

by Jan Bradburn- -

Raymer, 

The CGL has two coverage forms.  They are the occurrence and claims-made forms.  

The occurrence form coverage is the simpler of the two. Most property and casualty insurance policies fall into this category. Quite simply, "occurrence" form coverage means that the policy responds to events that occur during the policy period regardless of when the claim is made. Once the policy period is over, the policy will respond to covered claims, even if the claim is made many years after the triggering event (accident, wrongful act, injury, etc.).

The far more complex "claims-made" coverage form responds only to claims that are made during the policy period, though the triggering event may occur prior to the policy period if there is a "retroactive date" on the policy. The key to "claims-made" policies is maintaining continuous coverage. Without "continuity," insurers will not give you retroactive coverage.

Claims-made" coverage seeks to contain the volatile nature of the "tail." In property and casualty insurance lingo the "tail" refers  to the typical length of time between the triggering event and the claim. Asbestos claims, which often takes years to develop, is considered a "long tail" exposure. Libel and slander lawsuits, on the other hand, usually occur right after the triggering event.

I hope this helps.  You can post questions on the Forum or you can email me directly at bradburn@oltraining.com.  Either way, I always try to answer within 24 hours.  Please let me know if you have other questions.

Jan

In reply to Jan Bradburn-

Re: All-Claims Form - Retroactive Date

by Raymer Berlanga -

Mrs. Bradburn:

Thank you for the prompt reply. Yes, your answer helped clarified this topic a little bit more.

Ray.

In reply to Jan Bradburn-

Re: All-Claims Form - Retroactive Date

by LYNNE LABOMBARD -

Ms. Bradburn,

Could you explain just a bit more how the "claims made" form contains the tail?  This area is quite confusing with "continuous coverage, retroactive coverage and canceled or not renewed policies". I'm still trying to get a clear picture.  Thanks.

In reply to LYNNE LABOMBARD

Re: All-Claims Form - Retroactive Date

by Jan Bradburn- -

Hi Lynne, 

Don't spend too much time with this.  You only need to know that an Occurrence policy

provides lifetime coverage for the policy period, regardless of when a claim is reported.   A

Claims-Made policy covers only claims that occur and are reported while the policy is in

effect or after the retroactive date. 

The "tail" simply refers to the longer amount of time provided by the retroactive date.  

Jan