Page 242 - Liability Insurance IC74

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'claims made basis' trigger, the policy indemnifies the
insured against claims that are made against them during
the period of insurance. Most insurers use this trigger
in the policies. This animal insurers to limit their exposure
to latency losses because at the end of the policy period
the insurer is searching that no further claim will be
made against the policy.

Under the 'occurrence basis' trigger, the policy
indemnifies the insured against loss is incurred in a given
year, irrespective of when the claim is actually reported.
It is commonly used in Public and Product liability
insurance. So in simple words for occurrence based
policies loss must occur and be reported while the policy
is in force.

The major difference between the 'claims made' and
'occurrence basis' is that the former contracts are
forward-looking whereas the latter contracts are
retrospective. Claims made policy can also be extended
to cover losses which cut before the inception of the
policy. This is termed as 'retroactive cover'and the date
since when the policy will respond is known as
'retroactive date.'

(c) Estimated annual turnover - the annual turnover

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