What does claims-made mean for management liability insurance?

Claims-made means the policy only covers claims that are both made against you and reported to the insurer while the policy is active, regardless of when the underlying problem actually happened. Most management liability policies, including directors and officers and employment practices coverage, are written this way, so understanding it is essential.

This is different from how home and auto policies work. Those are occurrence policies, which cover an event that happens during the policy period no matter when the claim is filed. A claims-made policy cares about the date the claim is brought, not the date of the event.

On a claims-made policy, timing decides whether you are covered:

• The claim must be made while the policy is in force, or during an extended reporting period you purchase.
• Continuous coverage matters, because a gap can leave you exposed to claims tied to past acts.
• A retroactive date sets how far back covered events can have occurred.
• Tail coverage can extend your ability to report claims after the policy ends.

For example, a Georgia company makes a hiring decision in 2025 that leads to a lawsuit filed in 2026. As long as the management liability policy is active in 2026 when the claim is made and reported, and the retroactive date reaches back to 2025, the claim can be covered. If the company had let the policy lapse, the claim could fall through the cracks.

The most important rule with claims-made coverage is to keep it continuous and never let it lapse without arranging tail protection. We can explain how your policy’s retroactive date and reporting rules work in plain language. Request a free coverage review and a licensed advisor will confirm whether your management liability coverage has any gaps.