Claims-made policies: questions to ask before switching

Make a timeline before the call

On one sheet, note the dates of earlier work, your current policy period, the proposed renewal or replacement date and any relevant client complaint. Include a retroactive date if one appears in the documents, and mark it as a policy term requiring explanation rather than interpreting it yourself.

Professional liability is commonly written on a claims-made basis, as the Insurance Information Institute explains. Timing and notification conditions deserve attention when you change insurer, retire or stop trading. Read your own wording and obtain advice on the particular sequence of events.

Questions for a proposed switch

1. How does the proposed wording address work completed before its start date?
2. Is there a retroactive date, and what does it mean in this policy?
3. Are there exclusions or conditions relating to prior knowledge or existing circumstances?
4. What must be reported, to whom, by which deadline and in what form?
5. What happens if the current and proposed periods do not meet exactly?
6. Which documents confirm the answers?

Keep the current insurer’s response separate from the new provider’s response. A statement about one contract does not automatically describe the other. Ask for clarification where their explanations leave an apparent gap.

Do not wait for a lawsuit to ask about a complaint

If a client has already raised a concern, review your notification obligations promptly and contact the appropriate insurer or broker. This guide cannot decide whether a particular email is a claim or a circumstance that must be reported. Avoid using a general website definition to postpone a notification required by your policy.

Prepare a factual chronology, retain relevant correspondence and follow the insurer’s instructions. Do not send confidential documents to this website; it does not operate a claims service.

Closing the business is another review point

Stopping new projects does not answer how an allegation about past work would be treated. Ask whether extended reporting or run-off arrangements are available and what they actually do under the proposed terms. Clarify their duration, scope, cost and any continuing duties.

Use a simple written prompt: “I expect to stop providing these services on this date. What should I understand about potential allegations concerning work already completed?” Include any remaining contractual obligations for professional review.

Keep the continuity file

Retain policy schedules, full wordings, endorsements, applications and correspondence together. Use descriptive filenames that include the policy period. Keep a short index identifying which documents apply to which dates.

At the end of the discussion, write down what you believe has been agreed and ask the adviser to correct misunderstandings. The purpose is to make an informed change with the relevant documents available, not to infer cover from the label “claims-made.”

An illustrative timeline to take to your adviser

Consider three events: you complete a project, change insurer later, and subsequently receive a client allegation about that project. Put the actual dates on a timeline and attach the relevant policy documents. Ask how each contract treats the sequence, including any reporting obligations and prior-work provisions.

Do not assume the policy active on any one date must pay. Nor should you treat a general diagram as a reason to delay telling an insurer about an existing concern. The definition of a claim, knowledge of circumstances and reporting terms may all require interpretation.

The timeline is a way to communicate facts clearly. It is not a coverage test, and this site cannot decide which contract responds.