Liability vs Professional Indemnity:

The Difference between Claims-Made and Occurrence-Based Insurance

Not all insurance policies respond the same way when something goes wrong — especially when it comes to Liability vs Professional Indemnity.

Let’s break it down:

Occurrence-Based

• Common for Public Liability

• It covers events that happen during the policy period, even if the claim is made years later.

• Great for physical incidents like slips, trips, and property damage.

  
  

Claims-Made

• Common for Professional Indemnity

• It covers claims that are made while the policy is active, regardless of when the work was done.

• Perfect for advice-based services, where issues may come up years later.

• If you cancel a claims-made policy and a claim comes in later — you might not be covered! That’s why continuity and run-off cover matter.

Why can't my Professional Indemnity insurance be occurrence-based?

Great question — and here's why:

Professional Indemnity (PI) insurance covers you for financial loss caused by your advice or services.

The challenge? These types of claims often show up months or even years after the work was done.

That’s why PI policies are always “claims-made” — meaning:

You’re covered if the claim is made while your policy is active (not when the advice was given). Cancelling a PI policy means all previous work is no longer covered. “Occurrence-based” won’t work here, because the claim timing is usually delayed and unpredictable.

Think of it like this: If a client sues you today over something you did five years ago — you need a current policy in place that responds when the claim is made, not when the work occurred. You may not have had a policy in place then but if you do now, you're covered for that incident five years ago.

Moral of the story? Keep your PI policy up-to-date and talk to your broker before switching insurers or cancelling a policy — or you could be left exposed.