What is often a requirement for claims made coverage in a Professional Liability policy?

For claims made coverage in a Professional Liability policy, an essential requirement is that the incident giving rise to the claim must occur during the policy period. This is because claims made policies are specifically designed to respond to claims that arise from incidents that happen while the policy is active.

This means that if a professional service results in a claim, for it to be covered, the event leading to that claim must have taken place during the timeframe specified by the policy. This feature differentiates claims made coverage from occurrence coverage, where an incident could be covered as long as it occurred during the policy period, regardless of when the claim was filed.

The policy's requirement for the incident to occur within the designated period helps the insurer manage risk by limiting exposure to claims arising from past activities that might be determined long after the event. This is a fundamental aspect of claims made policies, ensuring that both the insured and the insurer have a clear framework for managing potential claims.