Insurance terminology explained in simple terms
Claims-made Principle (for Damage Events)
The claims-made principle, defines the circumstances under which a damage event exists. It is crucial here that the claims are made within the term of the insurance.
In D&O insurance (Directors & Officers insurance, also known as manager indemnity insurance), which is a special form of professional indemnity insurance, the claims-made principle is common. In the area of business liability insurance (e.g. general liability insurance), on the other hand, the damage event theory is mostly used. The damage event here is the event that immediately causes the damage.
In most professional indemnity insurance contracts, which include financial loss indemnity insurance as a basic component, the violation theory (time of professional oversight) is used.
Term: Claims-made Principle (for Damage Events)
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