What characterizes a "claims-made" policy?

A "claims-made" policy is characterized by the requirement that a claim must be reported to the insurer during the policy period for coverage to apply. This means that the timing of when the claim is made is critical; it must happen while the policy is active. Coverage does extend to incidents that occurred prior to the policy period as long as the claim is reported after the incident but within the timeline specified in the policy. Essentially, this type of policy links the coverage to when the claim is made rather than when the underlying incident occurred, making it distinct from "occurrence" policies that cover incidents occurring during the policy period regardless of when the claim is reported. Thus, the correct understanding is that in a claims-made policy, it’s not enough for the incident to have occurred during the policy; the claim must also be filed while the policy is still in effect to receive coverage.