Liability Insurance-Claim made basis Vs Occurrence basis
Any liability can be issued on any of these basis i.e. Claim made or Occurrence basis. In India, generally the policy is issued on Claim made basis but some Private Insurers have come out with Occurrence basis, which in true sense , is not Occurrence basis. Actually, under Occurrence basis, the claim can trigger during the currency of the policy but Insurer may be informed after expiry of the policy i.e even after 20 -25 years and the claim is payable. Under claim made basis, the Insurer should be informed either with in 2 years from the Retroactive date or 6 months after the expiry of the policy. The Private Insurers have increased the time limit of intimation from 2 years to 5 or 6 years and claiming it to be “Occurrence Basis” policy. One of the private insurers has defined “event” as “Occurrence” and claiming it to be the Occurrence basis policy.
An insured has received a Quote, wherein, in the column “Risks Covered” an insurer has shown CGL policy on Occurrence Basis but in the column “Policy Basis” it has been mentioned as “Claims Made”. The insured has got confused.