Thursday, March 13, 2008

Incident Sensitivity, Part 1 (3/13/08 Knowledge Knugget)

What is "Incident Sensitivity"?

  • The term "incident sensitive" is most common in medical malpractice, but the concept is universal in professional liability and critical in claims-made policies.
  • In D&O policies and some other E&O forms, it's known as a "discovery provision"
  • Incident sensitivity allows the insured to put its carrier on notice of potential claims, circumstances that the insured reasonably believes could arise in a claim, or an act that could be "wrongful" and result in a later claim.
  • Once such an incident or circumstance is reported, the carrier will respond to a future claim arising therefrom as if that claim had been reported during the policy period.
Why is this important? Tune in to next week's Knowledge Knugget to find out.

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