Category: Claims handling · Reviewed by Matt Bartlett, Director · Founder · Last reviewed 2026-06-11
Claims-made cover responds to claims first made against the insured (and, in claims-made-and-reported wordings, first reported by the insured) during the policy period — irrespective of when the underlying act or omission occurred.
Claims-made cover is the dominant structure for professional indemnity, directors and officers liability, employment practices liability, cyber and a number of other specialty lines. It emerged in the US in the 1970s to allow insurers to underwrite long-tail professional exposures without inheriting decades of unknown claim development. Today it is the default structure for almost all professional and management liability cover in the UK and Lloyd’s markets.
The strength of claims-made cover is its predictability for the insurer: each policy year is a defined window, and at the end of the period the insurer’s exposure to new claims for that year is largely closed (subject to extended reporting periods and circumstance notifications). The weakness is its complexity for the insured: the insured must maintain continuous cover with a sensible retroactive date, and must notify circumstances proactively to preserve cover for known issues.
Claims-made cover is governed by the policy wording, construed under English contract law principles. The Insurance Act 2015 applies — particularly sections 10 (warranties), 11 (terms not relevant to the loss) and 13A (reasonable time to pay).
A small number of English cases shape claims-made analysis:
For solicitors, the SRA Minimum Terms and Conditions for PI cover prescribe a claims-made wording with mandatory features including unlimited retroactive cover, six-year run-off cover and aggregate cover at £2m or £3m depending on entity. For other regulated professions (accountants, surveyors, architects, IFAs) the regulator’s minimum terms vary but most prescribe claims-made structures.
Trigger analysis under claims-made cover focuses on three dates:
The claim falls within cover if all three align: the claim is first made within the policy period, notification is given within the period or any allowed grace period, and the underlying act occurred on or after the retroactive date.
Circumstance notification is a critical feature of claims-made cover. The insured is entitled to notify, during the policy period, any circumstance that may reasonably give rise to a claim in the future. If valid notification is given, any subsequent claim arising from that circumstance is deemed to have been first made in the period of notification — even if the claim itself crystallises years later. This is the device that allows insureds to lock in cover for known issues even where the substantive claim may emerge after the policy has expired.
For policies on a “claims-made-and-reported” basis the trigger requires both that the claim is first made during the period and that it is reported to the insurer during the period (or within any extended reporting period). A claim made on the last day of the policy but reported on the first day after expiry is not covered under a strict claims-made-and-reported wording, though some policies extend a 30 or 60 day reporting tail.
Run-off cover is the mirror image. When an insured ceases trading or changes insurer, run-off cover extends the period during which claims can be made — typically six years for solicitors, three years for surveyors, varying by profession. Without run-off, claims emerging after the cessation are uninsured.
“Discovery period” or “extended reporting period” (ERP) wordings extend the time within which claims can be reported beyond the policy period for an additional premium. ERPs are common in D&O and cyber business.
“Pure claims-made” cover responds to claims first made during the period regardless of when reported, with a long-stop date driven by limitation rather than reporting. This is rare in modern wordings.
“Claims-made-and-reported” cover requires both events during the period (or any defined ERP). This is the more common modern wording.
“Linked policies” allow continuous cover across multiple successive periods with the same insurer, providing seamless cover provided the policyholder maintains the relationship. Most modern English PI policies are written this way.
A surveyor’s firm is insured continuously with the same insurer since 2018 on a claims-made-and-reported wording with unlimited retroactive cover. In April 2026 the firm notifies a circumstance: a 2020 valuation has been challenged by the lender’s solicitors but no formal claim has yet been made. The notification is valid under Rothschild v Collyear because there is a real possibility of a claim. In November 2026 the formal letter of claim arrives. The claim is deemed first made in the 2025-26 policy year (the year of the circumstance notification), even though the letter of claim is delivered in the 2026-27 year. The 2025-26 policy responds; the 2026-27 policy is not engaged. The retroactive date (none, in this case) does not bite. The substantive defence and quantum work proceeds against the 2025-26 wording.
By Matt Bartlett, Director, on 2026-06-11. Next review: 2026-12-11.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-11. Apex Insurance Brokers Limited, FCA FRN 724952, Companies House 07014570. Not regulated advice — consult your broker on your specific position.
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