Claim

What counts as a claim depends on your policy's definition. On liability policies it usually means a written demand for money or services, a lawsuit, or a formal regulatory proceeding against you. Some policies also include informal demands or requests to toll a statute of limitations. Reviewing the "claim" definition tells you exactly what event triggers your coverage.

Report a claim to your insurer as soon as you become aware of it—most policies require notice "as soon as practicable," and claims-made policies (D&O, Cyber, Tech E&O) are especially strict. Even if you're unsure whether something will develop into a claim, notifying your insurer of the circumstance protects your coverage. When in doubt, tell your broker immediately.

Late notice is one of the most common reasons insurers deny claims, particularly on claims-made policies where reporting within the policy period is a coverage condition. Depending on the policy and state law, late reporting can reduce or entirely void coverage for that claim. Prompt notice is the single most important thing you can do to protect a claim.

A lawsuit is one type of claim, but not the only one. A claim is any demand that triggers coverage—it can be a written demand letter, a regulatory investigation, or a formal lawsuit. A lawsuit is a claim that has escalated into court proceedings. Most liability policies respond to claims well before they become lawsuits, covering defense costs from the demand stage.