Originally published on August 4th, 2016. Last updated on June 17, 2024.

As a doctor of optometry, it’s important to know which types of coverage are available so you can make the best choice to protect yourself. Read on to learn about an important coverage distinction available to optometrists — claims-made or occurrence coverage.

 

Understanding Claims-Made Policies for Optometrists

Simply put, claims-made or occurrence coverage determines how long your malpractice coverage will protect you from claims.

Claims-Made Policies

Claims-made policies require a claim to be made against the insured and reported to the insurer during the policy period, or effective dates.

They may also have an extended reporting period or a “tail,” which specifies an extended period after the cancellation of the policy when a claim can still be reported. This tail coverage is typically purchased when a claims-made policy is cancelled and will not be replaced by another claims-made policy because the business is no longer in operation or has procured an occurrence policy form.

To have your claim considered under a claims-made policy, the claim must meet two criteria:

  • The loss must have occurred during the active policy period.
  • The claim must be filed and reported to your insurer either during the active policy period (before a policy’s cancellation) or within any tail coverage period specified by your policy.

At the start, a claims-made policy is often more affordable than an occurrence policy. However, over time, premiums will experience step-rate increases. Because there is usually a delay between when an incident occurs and when its ultimately discovered and reported, the likelihood of reporting a claim to a carrier during your early years of coverage is minimal. This is why your premiums are much lower during this time. As the years progress, your exposure becomes greater, and your premium increases until you reach the “mature” rate.

Additionally, with a claims-made policy, you will likely have to add tail coverage after your policy has ended to ensure you’re covered should a claim be filed at a later date. Tail coverage can be costly, with some tail coverage costing up to 300% of an annual policy.

Female optometrist researching occurrence policies for optometrists

Claims-Made Policy Claim Example

George is an optometrist who had continuous Malpractice insurance since he began practicing in 2009. He retired in 2024 but did not purchase tail coverage.

  • Policy period: 1/1/2023 – 1/1/2024
  • Retroactive date: 7/1/2009

In April of 2024, a claim is filed against him for an incident that occurred in 2023. Though the claim occurred when George’s policy was active, claims-made coverage requires the policy to still be active for coverage to apply.

Without purchasing tail coverage, George would be responsible for covering the claim on his own.

 

Understanding Occurrence Policies for Optometrists

Occurrence Policies

Occurrence policies are a little different, in that they protect the policy holder from a covered incident even if the claim is made after the policy is no longer active. This allows for a bigger window to report claims.

If the loss or incident occurred during the active policy period, policy coverage would apply. It doesn’t matter whether a claim was reported during the policy effective dates or later.

This can be a useful feature in some cases, where there could be a significant lag between when an incident occurs and when a claim is presented.

Because of the length of time a claim can be filed with an occurrence policy, this coverage is typically more expensive than a claims-made policy.

Occurrence Claim Example

Maria had a Malpractice policy in 2021 and then retired.

  • Policy period: 6/1/2021 – 6/1/2022

In 2024, a claim was filed against her for an incident that occurred in July of 2021. Because the incident occurred while coverage was in effect, her policy will cover the incident. If the claim had been filed for 2020, when she didn’t have coverage, Maria would be responsible for covering the claim on her own.

 

Claims-Made Versus Occurrence Policies from Lockton Affinity

Developed with hands-on involvement by doctors of optometry, Malpractice insurance from Lockton Affinity is endorsed by the American Optometric Association and offers a multitude of benefits.

Not only does our Malpractice policy offer scope of practice coverage, options for group coverage, and more, we also offer Occurrence coverage to help you avoid the need for tail coverage.

See your price on Malpractice coverage now or contact our dedicated team with questions at (888) 343-1998.