When it comes to professional liability insurance, knowing exactly what you’re buying is crucial. For psychologists and mental health professionals, understanding the coverage options and core differences between claims-made and occurrence coverage helps ensure your protection and your peace of mind—matches your career and your budget.
Nearly all liability policies fall into one of two categories: claims-made or occurrence. Here’s what that means and how to decide which one fits you best in 2025.
What Is a Claims-Made Policy?
A claims-made policy provides coverage for incidents (claims) that occur after your policy goes into effect, but the claim must also be reported while the policy is active (often referred to as “in force”).
If a claim arises after your policy ends, you’ll need an Extended Reporting Period (ERP), also known as “tail coverage”, to stay protected. An ERP allows you to report claims even after your policy expires.
Example:
Dr. Insured purchased a claims-made policy in 2016 and maintained coverage through 2018, but didn’t renew or purchase tail coverage. In 2019, they were sued for an incident that occurred in 2017. Because the policy was no longer active and no ERP was in place, the claim isn’t covered—leaving Dr. Insured personally liable for damages.
Good news for policyholders:
The Trust offers complimentary, unrestricted tail coverage upon retirement, death, or disability. This benefit—often valued at 175% of your last year’s premium—is included at no cost. Plus, any changes to your current coverage or limits apply retroactively, protecting your prior years as well.
Premium tip:
Claims-made policies typically start out less expensive than occurrence policies, with gradual increases over the first seven years before stabilizing. While some carriers reach maturity at five years, The Trust’s extended structure ensures greater long-term value.
What Is an Occurrence Policy?
An occurrence policy covers incidents that happen during the policy year, no matter when the claim is reported—even if the policy has since expired. The key factor is that your policy was active when the alleged incident occurred.
Occurrence coverage offers lifetime protection for that policy period without the need for tail coverage. Each year of occurrence coverage carries its own separate limit, providing a sense of permanence and simplicity.
Example:
Dr. Insured carried an occurrence policy in 2018 but switched to a claims-made policy in 2021. In 2022, they were sued for an event that took place in 2018. Because the occurrence policy was active during that year, the claim remains covered—even though the policy is no longer in force.
From a pricing standpoint, occurrence policies cost more upfront, but many professionals value the set-it-and-forget-it coverage they provide.
Key Takeaways for 2025
Claims-Made: Covers incidents that occur and are reported while the policy is active (unless you add “tail coverage”).
Occurrence: Covers incidents that occurred during the policy period, even if reported years later.
The Trust Offers Both: Choose the structure that fits your career stage, risk exposure, and financial goals.
Why Choose The Trust?
Not all providers give you options, but The Trust does. Whether you prefer the affordability and flexibility of claims-made coverage or the permanence of occurrence protection, we’ll help you find the right fit.
The unexpected can happen, but with The Trust, you’re covered. (877) 637-9700, so we can help guide you on which choice is best for you and your career. The unexpected can happen, but The Trust has got you covered.