Question: Is your Professional Liability Policy written on a Claims Made Form or on an Occurrence Form?

Some may not even know the answer, but this query highlights a prime example why an adult day care owner may be placing his business in jeopardy.

 Insurance Case Scenario

Meet Paul, an adult daycare center owner. Paul knew he needed a NJ Professional Liability Insurance Policy (PLI). Unfortunately, Paul was not made aware of the fact that there is a difference between a PLI written on a ‘claims made form’ and one written on an ‘occurrence form’.

The Difference Between PLI Plans

Most PLI policies like the one Paul purchased are the claims made form. To be eligible for coverage for an incident that occurred during this type of policy, the claim must be submitted during the policy’s term. If the claim is not filed within the policy’s time-frame, the consequences can be devastating: the insured will not be protected – even if the claim is in reference to something that occurred before the plan terminated.

Related: How to ensure coverage after a PLI policy has expired

Timeline of Paul’s Professional Liability Claim

January 2013: Paul buys a policy dated from January 2013 to January 2014.

January 2014: Paul replaces his original policy with another one.

May 2014: A day care member sues Paul for a fall incident that occurred during the period that Paul had his original January 2013-January 2014 policy.

May 2014: Paul is not covered for the claim because the policy had expired by the time the claim was reported.

PRIME Insurance: Empowering the Insurance Customer

PRIME Insurance has been involved in adult day care and related nursing home insurance for the past 15 years. If there’s anyone who knows associated liability factors, it’s us. That’s why we’re passionate about educating customers about potential risks and about the necessity of acquiring appropriate coverage. Experience the distinction of partnering with the insurance experts: where your unique risks will be evaluated; where you’ll be informed and guided; and where the best policies and accompanying pleasing quotes are at your disposal.

PRIME Insurance is a 3-generation family-run independent agency that has won the admiration of the industry. We’ve been presented with numerous awards and been appointed to conduct direct business with more than 40 of the leading companies - big names such as ACE, ASI, ASSURANT, CHUBB, FOREMOST, Liberty Mutual, MetLife, PROGRESSIVE, Safeco, StillWater, Travelers, USLI, ZURICH and more. With over 10,000 satisfied customers, we benefit policyholders by reviewing current coverage, as well as by shopping our wide network to locate tailored coverage at competitively lowest quotes.

HAVE A PRIME DAY™!
Providing all forms of nationwide coverage, including coastal insurance, cheap auto insurance, low quote commercial umbrella insurance, flood insurance, renters insurance, homeowners insurance, bonds, workers comp, ife insurance and more, we invite you to experience the PRIME difference by visiting us on our online insurance website; emailing us at prime [at] primeins [dot] com; or by calling us at 732-886-5751!

Summary:

Adult day care owners, please listen up! Your professional liability insurance may not provide the coverage you think it does. Standard policies do not cover you for claims made after a policy’s termination – even if the incident occurred during its term! Stay with PRIME Insurance as it highlights the difference between PLI policies and how it can impact your business!