Occurrence Coverage

Occurrence coverage is an insurance policy which allows for insurance coverage for an injury or loss which occurs within the coverage period, regardless of when the injury claim is reported to the insurance company. Occurrence coverage allows for a medical professional to have injury protection coverage for injuries which arise sometime in the future.

For example, if a doctor purchases occurrence coverage with an effective date of February 2, 2005, and liability limits of $300,000, and the policy lapsed at the end of 2005 but the doctor was sued in 2006 for treatment which the doctor performed in March of 2005, because the occurrence coverage was effective at the time of the injury the insurance company would be required to pay up to the $300,000, regardless of when the claim was filed. This remains true even if the doctor now has insurance with another insurance company.

The benefits of occurrence coverage are there are fixed costs and the premiums for coverage which are understood prior to purchasing the policy. Occurrence coverage also provides long-term insurance protection. Occurrence coverage also allows a doctor to change insurance companies without gaps in coverage or additional costs. The downsides are it may be harder to determine whether the liability limits a doctor has purchased will be sufficient to cover future claims costs, and the stability of the insurance company can be jeopardized if the premiums charged are not adequate to fund the cost of claims.