There are two main types of malpractice insurance policies: claims-made and occurrence. They both protect professionals when someone files a complaint or lawsuit, but they work in different ways. Choosing the right one depends on your job, your budget, and how long you plan to stay in the same field or workplace.
A claims-made policy only covers you if the claim happens while your policy is active. That means if someone sues you today, and your policy is still running, you’re covered. But if someone sues you after the policy has ended—even if the mistake happened during the time you had the policy—you are not covered unless you bought extra protection called tail coverage. Tail coverage lets you stay protected even after the policy ends, but it costs more.
On the other hand, an occurrence policy covers you no matter when the claim is made, as long as the event or mistake happened during the time your policy was active. So even if you leave the job or stop paying for insurance, you’re still protected for things that happened in the past. You don’t need tail coverage with this type of policy, which makes it more simple and less stressful.
Claims-made policies are usually cheaper in the beginning. That’s why many people choose them when they are just starting out. But over time, the cost goes up, especially when you buy tail coverage at the end. Occurrence policies cost more from the start, but you don’t have to worry about extra fees later. For people who stay in one place or job for a long time, occurrence might be better in the long run.
If you switch jobs often or work as a contractor in different places, a claims-made policy with tail coverage may be easier to carry with you. But if you’re planning to retire or leave your profession soon, an occurrence policy might save you money because it gives you lifelong protection for past work without needing to buy anything extra.
Some employers only offer one type of policy. So sometimes you don’t get to choose unless you buy your own. It’s important to read your policy carefully and ask questions before you sign anything. Know when the coverage starts and stops, and what is required if you change jobs.
In the end, both types work well if used the right way. Claims-made is cheaper upfront but needs careful handling at the end. Occurrence is easier and safer long term, but it costs more in the beginning. What’s best depends on your work plans, your money, and your need for future protection.
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