What does claims-made mean for a Georgia management liability policy?

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Quick answer: Claims-made means the policy only covers claims first made and reported during the active policy period, regardless of when the underlying act occurred. That is why the retroactive date and tail coverage matter when a Georgia business switches carriers.

Claims-made means a management liability policy only covers a claim if that claim is first made against the business and reported to the insurer while the policy is active, regardless of when the conduct that caused the claim actually happened. This differs from an occurrence policy, which covers an incident based on when it happened rather than when the claim shows up.

Two dates matter under a claims-made policy. The first is the retroactive date, the earliest point in time the policy will cover conduct for. If a claim traces back to a decision made before the retroactive date, the policy will not cover it even if the claim itself is reported during the active policy period. The second is the policy period itself, the window during which a claim has to be made and reported to be covered.

This structure is why the retroactive date and a related feature, tail coverage, matter when a Georgia business switches management liability carriers. Tail coverage, also called an extended reporting period, is an add-on that keeps a lapsed or replaced claims-made policy open for new claims tied to conduct that happened while it was active, even after the policy itself has ended.

Example: a Georgia company carries directors and officers (D&O) coverage with one insurer for three years, then switches to a new carrier. A shareholder later sues over a decision the board made during year two, under the old policy. If the new policy's retroactive date is set to match the original policy's start, and the old policy is either still within its reporting window or was extended with tail coverage, the claim has a path to coverage. Without either of those protections, the claim can fall into a gap between the two policies where neither insurer responds.

Every management liability coverage type, D&O, EPL, and fiduciary liability, is typically written on a claims-made basis. This applies whether the policyholder is a for-profit business or a nonprofit organization. Georgia management liability insurance is available through Olive Cover, and a coverage review can check that a retroactive date and any needed tail coverage are set up correctly before a business switches carriers.