The policy form is a “claims-made” policy.  Claims made against the insured during the policy period are covered within the scope of the policy terms and conditions.  It is not the intention of the carrier to provide coverage for any claims made against the insured prior to the policy inception.  New claims that arise which are related to the Wrongful Act upon which a prior claim was based are also not covered.  This includes formal investigations, demands or other proceedings such as EEOC complaints.

An exclusion addressing such prior or pending claims is found in Section IV A4 of the policy.  With first year of claims-made coverage, the carrier typically sets the Prior and Pending Litigation date, the earliest date of claim activity potentially within the scope of coverage, equal to the policy effective date.  When the policy is subsequently renewed, the Prior and Pending Litigation date remains the inception date of the first claims-made policy, thereby creating “continuity” of coverage from one policy period to the next.

It is important to note that continuity does not alter the claims-made nature of coverage.  The insured is required to report claims on a timely basis, in order to comply with defense coverage provisions and to avoid rejection of the claim based on failure to give notice to the carrier within 60 days of the claim being made against the insured.

Please review the specimen policy form for all coverage terms and conditions.  The information contained on this page is meant to serve as a guide for understanding certain policy terms and conditions.  In no way should this information be construed to change, interpret or amend the policy language.