Definition
A claim is the event that triggers a “claims made” SAM insurance policy. When a claim is made against the insured, coverage is triggered and loss potentially starts to become payable, usually subject to a self-insured retention.
Where claims-made policies differ is in how they define a claim — and to the insurance, some of what looks like a claim isn’t one. A typical definition:
- a written demand or request for monetary damages against any of the insureds; or
- a civil or administrative proceeding initiated against any of the insureds.
Some definitions also include oral demands — the trigger still comes from outside the organization. Knowledge developed internally that a claim could be made is now most commonly handled by circumstance language rather than the claim definition.
Mandatory Reports
An area of concern for some SAM insureds is whether a mandatory report the insured is aware of should be notified — and if yes, whether as a claim or a circumstance. Talk to your broker or insurer when you take out the policy to establish how mandatory reports should be addressed.