General Liability Insurance Including Products Liability Insurance For Manufacturers, Distributors, Installers, Importers, And Sellers Of Products. Save Up To 38%!

General Liability including Products Liability may usually be purchased either on an Occurrence or Claims Made coverage form. As a general rule, the Occurrence coverage form offers superior protection but it can be significantly more expensive than the Claims Made coverage form.

The superior Occurrence coverage form protects against covered lawsuits as long as the policy is in force when the bodily injury or property damage occurs. As long as this condition is met, coverage is not jeopardized if the policy is cancelled or non-renewed and if the claim or lawsuit papers are subsequently filed.

On the other hand, the inferior Claims Made coverage form protects against covered lawsuits only when the following two conditions are met: 1) the policy is in force when the bodily injury or property damage occurs (just like the Occurrence coverage form) AND 2) the policy or a renewal of the policy is still in force when the claim is made. The second condition makes the Claims Made coverage form much more risky than the Occurrence coverage form since the Claims Made policy may not be renewed if the insured manufacturer or distributor can´t afford the renewal premium, shuts down operations, or if renewal terms are not offered by the carrier.

Those manufacturers or distributors that have the Claims Made coverage form and that shut down their operations may elect to buy "tail" coverage which in effect converts their prior Claims Made policies into an Occurrence policy; however, this can be too expensive for many to afford.

Changing a Claims Made policy from one carrier to a new carrier upon renewal may be a bit tricky because of a provision in a Claims Made policy known as a "Retroactive Date." It is of critical importance that the "Retroactive Date" is always set to be the first date that the first Claims Made policy was effective.

Even though the Occurrence coverage form is clearly superior for the reasons stated above, many start up operations opt for Claims Made coverage due to the affordability issue.

The above descriptions on the topics of Occurrence, Claims Made, bodily injury, property damage, coverage triggers, retroactive dates, and tail coverage have been greatly simplified for explanation purposes. You should always consult with a business insurance professional before making critical decisions in these areas.