The vast majority of professional liability insurers do not offer occurrence coverage because of the challenges in projecting the long-term costs associated with claims reported long after the termination of the policy. Remember, with occurrence coverage, the policy is triggered because the incident occurred during the policy period.

Consequently, a carrier may not know its actual exposure under an occurrence policy for many years after that policy period ends. As such, an insurer cannot book profits as quickly and may have to hold back premium to pay future claims that have not yet been reported under occurrence coverage forms. With claims-made coverage, if no claims have been made against the policy by the end of the policy period, the insurer can count the premium as profit (net of expenses, of course) and move on to the next year.