What is a claims-made policy?

A claims-made policy is a liability policy that only covers claims filed during the active policy period, regardless of when the incident occurred (as long as it happened after the retroactive date).

What you need to know

Unlike occurrence policies, claims-made coverage requires continuous renewal. If a customer gets food poisoning in 2024 but doesn’t sue until 2026, you need an active policy in 2026 for coverage—or you must purchase tail coverage when canceling the policy.

Why it matters for restaurant owners

Claims-made policies are less common for restaurants but are standard for professional liability and some specialty coverages. The key risk is switching carriers or canceling—you’ll need expensive “tail coverage” to protect against future claims for past incidents. Before buying claims-made coverage, understand the long-term commitment and budget for potential tail coverage if you ever switch insurers.