This review drills down to the very understanding of claims-made & occurrence-based liability insurance, rather than dealing with the cover provided by each liability policy per se. To assist our knowledge, the following liability classes, which are peculiarly impacted, are set out:

• Public & Products Liability (GPL) – some insurers cover Molestation/Sexual Abuse under *GPL
• Professional Indemnity (PI) – some insurers cover Molestation/Sexual Abuse under *PI.
• Directors & Officers Liability (D&O)
• Employment Practices Liability (EPL)
• Management Liability (ML)

*The crucial impact & indeed importance of the variance in cover provided (under claims-made vs occurrence-based) will be seen below.

CLAIMS-MADE LIABILITY

PI (including molestation/sexual abuse under PI), D&O, EPL & ML are all written on a claims-made basis. This means the insured is covered for claims made against them during the current period of insurance, irrespective of the date when the incident happened; (subject to the retroactive date – if not unlimited). There are two important criteria to observe with this:

1. By reason of the nature of claims-made policies, the insured is required to report or notify the insurer of any claim or known circumstance which may lead to a claim, within the current period of insurance;
2. It is the current insurer that will respond to a claim made against the insured, & not the insurer on risk at time of original incident.

OCCURRENCE-BASED LIABILITY

GPL (including molestation/sexual abuse under GPL), is generally always written on an occurrence basis. This means the insured is covered for legal liability to pay compensation to a third party for personal injury or property damage, caused by an occurrence happening during the current period of insurance, in connection with the insured’s business operations or its products or services sold or supplied.

(Occurrence means an event or series of events, including continuous or repeated exposure to substantially the same general conditions, which results in personal injury or property damage neither expected nor intended by the insured).

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