Claims-made and occurrence basis

French Cour de cassation, first civil chamber, December 19, 1990: clauses making liability cover depend on a claim being made during the policy period are void, treated as if never written. The Financial Security Act of August 1, 2003, through Article L. 124-5 of the Insurance Code, made claims-made lawful. The trigger decides which contract responds when years separate the event from the claim. On an occurrence basis, it is the policy in force on the day of the event, whenever the claim is filed. On a claims-made basis, it is the one in force when the claim is made, provided the insured did not know of the event at inception. Two mechanisms make it work. The retroactive date sets how far back covered events can go; the French statute sets no limit, so the date comes from the wording, and London or New York forms almost always carry one. The extended reporting period picks up claims made after the policy ends, at least five years under L. 124-5. The same article imposes the occurrence trigger on individuals acting outside a professional capacity. Professional liability and the liability sections of cyber policies run on a claims-made basis, and the gap opens when the insured switches carriers: an old event, claimed late, that no policy will pick up.