There are two standard Professional Liability policy forms available to business owners: claims-made policies and occurrence policies. Both offer coverage that helps protect home inspectors and their businesses, but there are a couple important differences.

As a franchise owner, it’s important to know what kinds of insurance is available to home inspectors so you can make the best choice for your business. It helps you make sure that you are adequately covered at the best possible price.

Policy Type Differences 

When you are evaluating claims-made versus occurrence policies, one of the first distinctions you’ll notice is when you can report a claim. This has to do with the effective dates of the policy.

Claims-Made Policies

For example, a claims-made policy will have these features:

  • An effective start date which begins the policy coverage.
  • An active policy period during which claims can be filed and reported.
  • A retroactive date is the date from which you have held uninterrupted professional liability insurance. Your current carrier will cover claims made against your business back to that date
  • An effective end date for coverage, typically a year after the start date, and which can of course be renewed for another year.

Claims-made policies may also have a “tail,” which specifies an extended period after the cancellation of the policy when a claim can still be reported.

To have your claim considered under a claims-made policy, you must meet two criteria:

  • The loss must have occurred during the active policy period.
  • The claim must be filed and reported to your insurer either during the active policy period (before a policy’s cancellation), or within any tail coverage period specified by your policy.

Claims-made policies may also have an extended reporting period or a “tail,” which specifies an extended period after the cancellation of the policy when a claim can still be reported. This tail coverage is typically purchased when a claims-made policy is cancelled and will not be replaced by another claims-made policy because the business is no longer in operation or has procured an occurrence policy form.

Occurrence Policies

In the case of occurrence policies, the focus is on when a loss occurs. As long as the loss or incident occurred during the active policy period, policy coverage would apply. It doesn’t matter whether a claim was reported during the effective dates of the policy or at some later time.

This can be a useful feature in some cases, where there could be a significant lag between when an incident occurs and when a claim is presented. Yet in other cases, it could mean that you have more insurance than is needed, relative to the risk involved.

What is the most common form for home inspectors?

Most carriers currently offering professional liability coverage for home inspectors do so with a claims-made policy form. This is advantageous to home inspectors because there is generally a cost savings recognized with this form.

It simplifies the claim reporting process, as all claims are reported to the current insurance carrier rather than tracking prior carriers to report claims based on the date of occurrence.

Claims-made policies also allow your coverage to grow with your business. After several years as a home inspector, you may need to purchase higher limits than when you first started out. A claims-made policy approach ensures that you aren’t relying on a previous policy with inadequate limits.


At Lockton Affinity, we want insurance to be as easy as possible for our customers. That’s why our program is designed to meet the risks you face as a home inspector, with policies that meet franchisor requirements, to ensure that you are properly insured at the best price. Plus, our dedicated team is here to support you whether you have a simple question or complex claim.