Claims-made policies

The trigger is filing date, not incident date

Under a claims-made policy, coverage depends on when the claim is made, meaning filed or first reported to the insurer, while the policy is in force. The policy also carries a retroactive date, a cutoff before which incidents are not covered even if the claim itself is filed on time. An occurrence policy works the other way: it responds to events happening during the policy period, and it does not matter how much later a claim shows up. General liability, the coverage that responds to slip-and-fall and similar claims on common areas, is typically written on this occurrence basis.

Why this matters most for D&O coverage

Board members' errors and omissions coverage, commonly called D&O, is the line where this structure shows up most often for an association.

"Almost all D&O coverage is 'claims-made,' though some may be 'occurrence.'"

Source: Community Association Insurance Manual, Epsten, APC

That makes D&O the coverage line where a board most needs to understand the claims-made mechanics, since a delay in reporting, or a gap around the retroactive date, can matter more here than it would under an occurrence-based general liability policy.

The gap that opens when you switch carriers

Because a claims-made policy only responds to claims filed while it is active, switching D&O carriers creates a real question: does the new policy's retroactive date reach back far enough to cover the board's past acts, and is the old policy still able to accept a late-arriving claim about something that happened while it was in force? The answer depends on the exact retroactive date and terms in each policy. Before your association changes carriers, ask the broker directly what happens to claims about events from the prior policy period.

Report promptly, every time

Most policies do not set a fixed number of days for reporting a claim, but delay itself can put the association's coverage at risk, so a board should report as soon as it learns of a potential claim rather than waiting to gather every detail first. In at least one state, New York, prompt notice can be treated as a condition that must be met before coverage applies at all, meaning late notice alone can bar the claim. Check your own state's rule and your policy's notice provision.