Occurrence Based Policy Vs Claims Made Policy In Texas
In an occurrence-based policy, the insured is covered for "all claims based on an event occurring during the policy period, regardless of whether the claim or occurrence is brought to the attention of the insured or made known to the insurer during the policy period." Yancey v. Floyd West & Co., 755 S.W.2d 914, 918 (Tex. App.--Fort Worth 1988, writ denied).
In contrast, a claims-made policy covers only injuries or damages that come to the attention of the insured and are made known to the insurer during the policy period. Id.
Thus, a claims-made policy, which contemplates a fixed termination point, is less expensive than an occurrence-based policy, for which the insurer may have difficulty calculating premiums based on the costs of the insured risks. Id. at 923 (discussing the economic distinctions between "occurrence-based" and "claims-based" policies).