Definition:Claims-made and reported policy
📋 Claims-made and reported policy is a form of insurance coverage that responds only when both conditions are satisfied within the policy period: the claim must first be made against the insured, and the insured must then report that claim to the insurer — all before the policy expires. This dual requirement distinguishes it from a standard claims-made policy, which typically requires only that the claim be made during the policy period (with reporting permitted within a reasonable time afterward). The "and reported" element adds a tighter constraint, and it is especially prevalent in the Lloyd's market and across London market specialty lines, where precision around trigger timing is essential for managing underwriting year exposures.
🔍 Operationally, the "and reported" condition places a sharper burden on the insured to act promptly. If a professional receives a demand letter on December 30 but does not notify the insurer until January 5 of the following year, the expiring claims-made and reported policy will typically decline to respond — and the succeeding policy may also exclude the claim if its retroactive date does not extend back far enough or if it contains a prior knowledge exclusion. To soften this harshness, many policies offer a short grace window — sometimes called a "reporting tail" of a few days — or the insured can purchase an extended reporting period endorsement. In reinsurance, the claims-made and reported structure is heavily favored because it provides cleaner allocation of losses to specific treaty periods, reducing disputes between consecutive-year reinsurers over which contract bears a particular loss.
⚠️ The practical stakes of this policy form are high. Policyholders — particularly in professional indemnity, D&O, and cyber lines — must build internal processes that ensure rapid escalation and notification of potential claims, because even a short delay can void coverage entirely. Brokers play a critical role in educating clients about the notification mechanics and ensuring seamless transitions between consecutive policy periods so that no gap in coverage emerges. For underwriters, the "and reported" requirement provides greater certainty when closing out underwriting years, since it caps the period during which new claims can attach. This structural certainty makes the form attractive in markets like Lloyd's, where syndicates must eventually close their years of account and transfer remaining liabilities through the reinsurance to close process.
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