What is the implication of professional indemnity insurance written on a claims made basis?

Professional indemnity insurance written on a claims-made basis operates by providing coverage for claims made against the policyholder during the policy period, regardless of when the incident that led to the claim occurred, as long as it is after the retroactive date specified in the policy.

The correct answer indicates that new claims must always be submitted to the current insurer. This is due to the nature of claims-made policies, which tie the insurance coverage to the specific timeframe of the policy in force when the claim is reported. If a professional indemnity insurance policy is current, any claims that arise must be directed to that current insurer, as they are the ones financially responsible for claims reported during their coverage period.

This aspect of claims-made policies can create complexities, especially when transitioning from one insurer to another or when the policy is not renewed. If a claim emerges after the policy has lapsed or if it was not renewed with the same insurer, the new insurer would not cover such claims unless there is an explicit buy-back of extended reporting period coverage.

The other options do not accurately reflect the mechanics of claims-made policies. There is no requirement for multiple claims to activate coverage, nor are previous claims the sole criteria for underwriting, and submissions regarding claims are linked to the