In civil liability claims we often ask ourselves what is the circumstance that triggers coverage under the policy. This will of course depend on the actual policy wording. In Portugal, liability insurance is arranged in one of the following three underwriting methods:

• action committed basis, where insurers accept the risk for all losses occurred after termination of the contract, if the triggering event has occurred during the insured period
• loss occurrence, where insurers agree to indemnify the losses revealed during the insurance period, regardless of the moment the event occurred or the claim against the insured was made
• claims made, where insurers will pay for losses (judicial decisions against the insured) that occur at any point in time, and which originate from events that occurred at any point in time, as long as the third party claim was made against the insured within the policy period or the customary additional discovery period.

The new Insurance Act, in effect since 1 January 2009, recognises the existence of this framework and specifically allows for claims made policies but as in the case of Spain, under certain circumstances it is obligatory to cover claims reported within one year following the standard period of insurance.

Claims made policies are common in professional liability insurance including D&O, and product liability.