TL;DR
Comparison
Which trigger should a senior care liability program be written on?
Whose decision: Operators comparing structures at renewal, and anyone contemplating a sale or a market change.
Last updated
| Factor | Claims-made | Occurrence |
|---|---|---|
| What triggers coverage | A claim first made and reported during the policy period, for an incident after the retroactive date | An incident occurring during the policy period, whenever the claim is made |
| Retroactive date exposure | Yes, and it is the most commonly missed defect at a carrier change | None |
| Tail coverage needed at exit | Yes, priced as a multiple of the expiring annual premium | No |
| Availability in senior care | Widely available | Scarcer, and unavailable in some segments |
| Relative premium | Lower, particularly in early years | Higher |
| Behavior on continuous renewal | Behaves much like occurrence | Same |
| What goes wrong | The retro date advances at a market change and prior years fall out of coverage | Little, once bound |
The recommendation
Occurrence removes an entire failure mode permanently, and in a class where operators change markets more often than they used to, that failure mode is the one that actually catches people. It also removes the tail purchase decision at a sale, which sellers routinely under-budget.
But for many operators the question is academic, because occurrence is not offered. Claims-made with a matched, continuous retroactive date and a funded tail plan is a perfectly defensible structure. Claims-made with neither is not.
If you do switch, handle it as a continuity project rather than a pricing exercise: occurrence covers incidents from its inception forward, so the prior claims-made years need either a purchased tail or prior acts coverage on the new policy. Without one of those you have protected the future and abandoned the past.
Follow-up questions
Compare the retroactive date on the current declarations page against the inception date of your first claims-made policy in the program. If the retro date is later, and no tail was purchased on the older policy, every year in between is uninsured for claims made now.
Yes. It can advance at a renewal with the same carrier if the policy is rewritten under a different form or a different named entity, which is why it belongs on an annual checklist rather than only on a market change.
Go deeper
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