Can someone tell you what exactly is a Manifestation occurrence Form Liability coverage And how it is different pro or con to a claims made policy?

Answer 1

* The occurrence policy is designed to cover occurrencesthat take place during the policy period. * The claims made policy is designed to cover claims that are reported during the policy period. * The manifestation occurrence policy is designed to cover occurrences that first manifest during the policy period. The occurrence policy has been around for centuries, but faced challenges in the 1900's due to enormous claims arising out of occurrences that were ongoing or continuous in nature. Claims Made and Manifestation Occurrence policies were created in response to these challenges. To explain the introduction of Claims Made and Manifestation policies, let's first look at the problems that Occurrence policies faced in the 1900s. Imagine that an insurance company writes a $1 Million liability insurance policy for a coffee shop and this policy renews every year from 1940 to 1970 where $1 Million is the most they will pay during the policy period (aggregate limit) and the most they will pay for any one occurrence (the per occurrence limit). The insurance company probably thinks that their liability exposure for insuring the business is limited to a maximum of $1 Million and they should collect the appropriate premium to offset this risk. William and Edith visit the coffee shop for a cup of coffee every morning for 30 years. If they slip and fall or have a horrible coffee incident in 1965, the most the insurance company should have to pay is $1 Million because it would be one bodily injury occurrence during one policy (1965) and the maximum limit for this is $1 Million. But. . .what if in 1971 we learn that the coffee shop has been filled with asbestos for the past 30 years and William and Edith are dying of cancer and it is determined that their exposure to the coffee shop's asbestos is the cause of their cancer. In what year did the occurrence take place? Didn't it take place in 1940 and 1941 and 1942 and in every year in which they were exposed to the asbestos at the coffee shop over the past 30 years? Suddenly, the insurance companies (and courts) realized that this is not a $1 Million claim, but perhaps 30 separate $1 Million claims because we are looking at 30 policies each designed to cover occurrences that take place during a policy period. This is where the Claims Made and Manifestation Occurrence Policies come into the story as well as an introduction to a complete asbestos exclusion to just about all occurrence policies. Whereas the occurrence policy mentioned above might have to pay $30 Million under 30 separate policies, a $1 Million Claims Made policy would pay only $1 Million because that is the maximum amount that the insurance company would pay for any claims during that one year period when the claim is reported. Once the Claims Made policy ends, there is no coverage unless an extended reported period or "tail" is purchased to cover claims into the future. Therefore, in the example above, if the coffee shop had a Claims Made policy every year and the coffee shop closes in 1970 and there is no coverage in 1971 when the claim is filed, there is no insurance coverage unless they purchased a coverage extension. The manifestation occurrence policy would also only pay $1 Million because the occurrence could only first manifest itself during one policy. Different policies might have different definitions of "manifest" including something like "to become apparent to a common observer." However manifest is defined, it is clear that it can only FIRST manifest once and so only the policy in which it first manifests will have an obligation to pay. If, in the example above the bodily injury is first manifested during 1965, the 1965 policy would be the only manifestation occurrence policy that will pay for the bodily injury occurrence. If it manifests itself again in 1966, this would not be the first manifestation of the occurrence and the 1966 policy would have no obligation to pay. Notice that in the example of the occurrence policy, it did not matter when the claim was reported or when the coffee was poured. What mattered is when the occurrence took place. The occurrence policy insuring agreement states that they will pay for occurrences that take place during the policy period. PERIOD. It is true that your policy might have products and completed operations, but again, the occurrence form insuring agreement states that it will pay for occurrences that take place during the policy period. PERIOD. If an insurance agent tells you that you are covered in the future with your occurrence policy, ask for this in writing along with a copy of the agent's own professional liability insurance policy because this may be the only policy that will provide you with future coverage.