Occurrence rates are usually the basis for pricing of medical professional liability insurance. During the first few years of coverage, Occurrence coverage rates are generally higher Than Claims-Made Coverage. This is because the cost of claims that may be reported at some unknown time in the future is taken into consideration in the determination of Occurrence rates. The Claims–Made rates increase annually, until they reach ‘maturity’, which in New Jersey is in the fifth year and in New York is in the eight year.
Claims-Made coverage takes into consideration the insurance company’s exposure to claims that may be reported on a year to year basis. The longer the period you are insured with a company, the greater the possibility of a claim being reported; thus, the annual premium increases.