Insurance Glossary

Know What You’re Buying

A demand received by an Insured for money or services including the service of Suit.

Claims Made Policy
A policy providing liability coverage only if a written claim is made during the policy period. For example, a claim made in the current year could be charged against the current policy even if the loss occurred many years in the past.

Declarations Page
The Declarations Page identifies the named policyholders, the amount of coverage purchased by the Firm, the deductible, the policy term, and any special forms, such as endorsements.

A form attached to the policy, which alters provisions of the contract. Attachment or addendum to an insurance policy; an endorsement changes the contract’s original terms.

An endorsement that extends the period of time after policy expiration in which a claim can be made, or filed, and still be covered. This is also known as tail coverage.

Prior Acts Coverage
The prior acts is a date used to extend retroactive coverage for errors and omissions occurring prior to the effective date of the current policy. This date is set forth in your policy and may change if a gap in your coverage occurs.

Professional Services
Services performed by an Insured on behalf of the Named Insured: in a lawyer-client relationship; as a notary public; as a personal representative, conservator, receiver, guardian, or trustee; as an arbitrator, mediator, referee, special master or hearing officer; as a title agent.

Step Rates
Typically, professional liability claims are made a number of years after the act or omission that caused the claim. The amount of time between when services are rendered and when a claim arises varies, depending on the type of services provided. Consequently, with each successive year of claims-made coverage, the likelihood of experiencing a covered claim increases. To reflect this likelihood, insurance companies offer significantly lower policy premiums in the first year of coverage, and then gradually “step” the premium rate through yearly increases.

Tail Coverage
A term that is used to describe both the exposure that exists after the expiration of a policy and the coverage that may be purchased to cover that exposure. On a “claims-made” policy, tail coverage may be purchased to extend the period for reporting covered claims beyond the policy period.