Basically, occurrence coverage provides protection for professional services rendered while the policy is in effect, regardless of when the patient files a claim. Even after you stop practicing, your occurrence policy will still provide you and your estate with coverage for the professional services you provided during the policy term.

Premiums for each policy period are certain when the policy is purchased. There are no additional costs.

At each renewal, most insureds may choose an amount of coverage for the new policy period and are protected up to that limit, regardless of when the claim is filed.

Fewer insurers offer occurrence coverage than claims-made. In fact, occurrence coverage may not be available in all areas of the country. Insurance companies must plan for long term liability exposure when issuing occurrence policies.

While occurrence coverage is based on when the act occurred, claims-made coverage is based on when the act is reported (when the claim is actually made).

Claims-made policies provide coverage for claims, which are reported to the insurer, while the policy is in force. The policy covers professional services rendered on or after (1) the policy inception date or (2) an earlier retroactive date. The retroactive is a date mutually agreed upon by the company and the insured. Thus, claims-made policy may provide coverage for professional services rendered from a retroactive date through cancellation or expiration of the current policy, so long as the claim is reported to the insurer during a policy period.

Each year as the policy is renewed the price increases to compensate for the increased risk of receiving claims from the previous years. Premium increases, often called "steps", reflect the insured's increased exposure to this liability. Steps usually cease after five years have transpired from the retroactive date.

Due to cancellation or non-renewal, an additional premium to purchase an Extended Reporting Endorsement, commonly called "tail coverage", may be required to provide protection for claims reported after the final claims-made policy's termination date.