A claims-made policy covers claims that are both reported during the policy period and arise from incidents that occurred after the policy's retroactive date. Unlike an occurrence form, a claims-made policy only responds if the claim is filed while the policy is active. If your policy lapses or you switch carriers without purchasing tail coverage, you lose protection for incidents that occurred during the claims-made period but have not yet been reported.
Claims-made forms are uncommon for standard roofing CGL policies but are standard for professional liability (errors and omissions) coverage. If your roofing business provides design-build services, consulting, or inspections and carries an E&O policy, it is almost certainly on a claims-made basis. Understanding the retroactive date is critical: only claims arising from work performed after that date are covered. If your retroactive date is January 1, 2023, a claim arising from work you performed in 2022 is not covered even if the claim is filed during the active policy period.
The biggest risk with claims-made policies is the gap created when you cancel or non-renew without purchasing an extended reporting period (tail coverage). Tail coverage extends your ability to report claims for a defined period, typically one to five years, after the policy ends. For roofing contractors with E&O exposure, purchasing tail coverage when changing carriers is essential to avoid an uninsured gap for past professional services. Always ask about tail coverage options and costs before switching claims-made carriers.