Malpractice Insurance Terms

Claims-Made Policy

A policy providing liability coverage only if a written claim is made during the policy period or any applicable extended reporting period. For example, a claim made in the current year would be covered by the current policy even if the allegation occurred many years in the past.

View our Claims-Made Policy here

Prior Acts Coverage

The prior acts date stipulates the extent of any retroactive coverage for errors and omissions occurring prior to the effective date of the current policy. This date is set forth on the declarations page of your policy and may change if a gap in your coverage occurs. 

Step Rating

Premiums for a claims-made policy are commonly set by what is called "step-rating methodology." This procedure attempts to quantify the degree of exposure presented by a particular insured and relates to the prior acts provided. The number of continuous years an attorney is insured determines the step rate. The step rate will increase each year, until it reaches the "mature" rate. The maturely underwritten rate (maximum) is reached in the seventh year under OAMIC’s policy.

Endorsement

A form attached to the policy providing changes to the terms of the policy in order to address specific circumstances. For example, adding or deleting attorneys.

Extended Reporting Endorsement

An endorsement enabling making claims after the expiration of a "claims-made" liability policy, also known as "tail" coverage.

Tail Coverage

This term has been used to describe both the exposure that exists after the expiration of a policy and the coverage that may be purchased to cover that exposure. On a "claims-made" policy, tail coverage may be purchased to extend the period for reporting covered claims beyond the policy period.

Claim

A claim is the notification of an incident made to the insurance company and a demand for benefits as provided by the policy. With a claims-made policy, a claim must be reported to the carrier as soon as you know of the claim and during the time your policy is in effect. Unless this is done, the claim may not be covered.

Claim / Incident Notification

Notification is an insured reporting any potential claims or incidents which may result in a claim during the policy period. Reporting of all potential claims is crucial to the claims-made policy and all insureds are asked to disclose incidents as soon as they are aware of them.

Deductible

A provision or clause in your insurance policy that the first dollars expended, whether indemnity or expense, will be reimbursed to the company by the policy-holder. All insureds under the policy are jointly and severally liable for the deductible.