In liability insurance, what does a claims made policy require in order to provide indemnity?

A claims made policy in liability insurance is structured in such a way that coverage is triggered only when a claim is made during the policy period, regardless of when the incident that caused the claim occurred. This means that in order for indemnity to be provided under a claims made policy, it is essential that the claim is reported to the insurer while the policy is active.

If a claim is made after the policy has expired, even if the incident occurred when the policy was in force, indemnity will not be offered. This feature distinguishes claims made policies from occurrence policies, where coverage is based on the date of the incident rather than when the claim is reported.

To summarize, the fundamental requirement of a claims made policy is that claims must be made during the policy period for the insurer to provide indemnity, ensuring that the insured is adequately covered for claims arising from their actions within that specified timeframe.