Glossary

Claims-made policy

A claims-made policy covers a claim only if both the incident and the claim occur while the policy is active. If the policy lapses and a claim arrives later for something that happened during the covered period, a claims-made policy without tail coverage will not respond.

By Andrew Bate, Co-founderReviewed by Stuart BateUpdated September 14, 2026

Why this matters for property managers

E&O and other professional liability policies for property managers are usually claims-made. Switching carriers or letting a policy lapse without buying tail coverage can leave a gap for disputes that surface a year after the fact — which is exactly when owner lawsuits tend to appear.

Related terms

Occurrence-based policy

An occurrence-based policy covers any incident that happens during the policy period, regardless of when the claim is filed. Damage in January that is claimed in June — even after the policy expires — is still covered.

Errors and omissions (E&O)

Errors and omissions insurance is professional liability coverage for claims arising from mistakes or failures in professional services. If a homeowner sues a property manager for failing to maintain adequate insurance on their property, E&O responds.

Subrogation

Subrogation is the insurer's right to recover what it paid on a claim from the party responsible for the loss. If a vendor causes damage and the insurer pays, the insurer may pursue the vendor to recover the payment.

Browse every term in the insurance glossary for property managers.

Claims-made policy: common questions

What is tail coverage?

An extended reporting period purchased when a claims-made policy ends, allowing claims to be reported after expiry for incidents that happened during the policy period.