When you’re in the market for commercial insurance, comprehending your options is crucial for safeguarding your business. At Ottawa Insurance Agency, serving the greater Zeeland, MI area, we often help business owners understand the differences between occurrence and claims-made policies. While this topic may initially seem perplexing, breaking it down makes it easier to determine which one best suits your needs.
Defining an Occurrence Policy
An occurrence policy covers incidents that transpire during the active policy period, even if the claim is filed years later. For instance, if a problem emerges from work you completed while the policy was in force, and a claim is made long after the policy ends, you’re still covered. This type of policy is particularly beneficial for businesses seeking long-term protection without worrying about gaps after the policy expires.
Deciphering Claims-Made Coverage
With a claims-made policy, both the incident and the claim must occur while the policy is active. If your policy ends and a claim is filed later, you’re not covered—unless you’ve added what’s known as tail coverage. This type of policy can be more affordable initially, but it necessitates careful monitoring of coverage dates and renewals to prevent lapses in protection.
Choosing the Appropriate Policy
The choice between these two policy types depends on your business’s nature, your budget, and how far into the future you want your protection to extend.
If you’re unsure which policy structure is best for your business, Ottawa Insurance Agency, proudly offering insurance solutions to business owners in the greater Zeeland, MI area, is ready to assist. Contact our team today for expert guidance and tailored insurance solutions.
