Coverages & Policy language can be an overwhelming thing to comprehend and understand. Claims made coverage and occurence coverage are two different types of policies that insurance companies offer. Claims Made coverage is typically what type of policy your Nonprofit Directors & Officers Policy is.
With claims made coverage – claims need to be reported within the policy period. If the policy term is from 1-1-2011 to 1-1-2012 the claim must be reported within that policy period in order to have coverage. If the policy expires and there is lapse, coverage is void for that policy term unless tail coverage is obtained.
If tail coverage is purchased this provides coverage for any claims that are reported for up to two years after the policy ends for any claim that would arise in the policy period. The key to claims made coverage is to make certain you do not have a lapse in coverage especially if you are moving coverage from carrier to carrier. Be sure that your new carrier pick up the retro date, or the effective date of your first claims made policy.