Guides
Occurrence vs claims-made policies
How occurrence and claims-made liability policies decide which year's policy pays, why retroactive dates and tails matter, and which lines use each trigger.
An occurrence policy covers injury or damage that happens during the policy period, no matter when the claim is made. A claims-made policy covers claims first made against you during the policy period (or an extended reporting period), provided the event that caused the claim happened after the retroactive date. The trigger decides which year's policy pays, and whether coverage disappears the day you cancel.
The two triggers side by side
| Occurrence | Claims-made | |
|---|---|---|
| What must happen in the policy period | The injury or damage occurs | The claim is first made against you (and reported) |
| When the claim is filed | Can be years after the policy ends | Must be during the policy or an extended reporting period |
| Retroactive date | None | Yes: the event must be after it |
| After you cancel | Old policies still respond to injury that occurred while they were in force | Coverage stops unless you buy a tail |
| Typical premium pattern | Stable, rated for the full exposure | Lower early on, rising over several renewals as the retroactive date recedes |
| Main trap | Finding old policies decades later | A gap in dates, or late reporting |
How the standard ISO general liability form works
The ISO occurrence form, CG 00 01, covers "bodily injury" and "property damage" only if they are caused by an "occurrence" in the coverage territory, the injury or damage "occurs during the policy period," and no listed insured or authorized employee knew about it before the policy began (paragraph 1.b of the insuring agreement; the 04 13 edition text is excerpted here). If an insured knew of the injury before the policy began, any continuation or resumption is deemed known too, so it falls outside the new policy. This is why a contractor with a leak it already knew about cannot buy a new policy and send the claim to the new carrier.
Coverage B, personal and advertising injury, is triggered by an offense committed during the policy period, not by when the injury occurs. The claims-made version of the form, CG 00 02, has the same insuring agreement but adds that the claim must be first made during the policy period or an extended reporting period, and that the injury or damage did not occur before the retroactive date. As the form is generally described, a claim is deemed made when an insured or the insurer first receives written notice of it. Manuscript and carrier-specific forms vary, so read your own.
For what the ISO form says about the end of a claims-made policy, see tail coverage and extended reporting periods.
Which coverages use which trigger
Most property and casualty lines are on an occurrence basis, and most professional and management liability lines are claims-made.
- Usually occurrence: general liability insurance: what it covers and what it does not (CGL), commercial property, commercial auto insurance: what it covers and what it leaves out, workers' compensation, liquor liability and most umbrellas.
- Usually claims-made: Professional liability (E&O) insurance explained, Directors and officers (D&O) insurance explained, Employment practices liability insurance (EPLI): what it covers, fiduciary liability insurance for employee benefit plans, cyber (cyber insurance: what it covers for a business) and many medical malpractice policies. Environmental and pollution legal liability policies are often claims-made as well.
- Can be either: a CGL, especially in hard markets or for risks like products, and excess or umbrella coverage. Ask which.
- Different again: commercial crime (commercial crime insurance: what it covers and what it excludes) is written on a loss-sustained or a discovery basis, which is its own trigger.
Insurers like claims-made forms for long-tail liability because they can price with what they know today instead of guessing what an injury will cost in 2040. That is a benefit to them, and a burden on you: the insurance you bought for 2026 only works for you if you keep the chain going.
Claims-made and reported
Many professional policies add a second condition: the claim must be reported to the insurer during the policy period or within a short window after. These are sometimes described as "claims-made-and-reported" forms. A claim that is made on December 28 and not reported until January 15 can fall into a gap if the policy expired December 31 and the renewal is with a different carrier. Reporting also includes a "notice of circumstances" provision: if you learn of an incident that could become a claim, you may be able to report it before the policy ends and lock coverage into that year. Courts in different states treat late notice differently, and some apply a prejudice test even to claims-made reporting rules, while others hold the insurer to the deadline. See notice of claim and late notice: why timing matters and tendering a claim to another party's insurer.
The retroactive date
On a claims-made policy the retroactive date, set in the declarations, limits coverage to acts or events after that date. A first-year policy usually sets it to the inception date. Renewing with the same carrier keeps it fixed, which is how the policy covers more prior work every year. Changing carriers is where it breaks: if the new policy sets a later retroactive date, work you did before that date has no coverage anywhere. Ask the new carrier for "full prior acts" back to your old retroactive date, or buy a tail from the old one. prior acts coverage and retroactive dates covers this in depth.
A hypothetical comparison
Say a contractor builds a deck in 2023 from plans drawn by an independent architect. In 2026 the deck fails and injures a guest. In 2027 the owner sues the architect over the design. This is an illustration, not a prediction.
| Event | Policy that responds | Why |
|---|---|---|
| Guest's injury, 2026 | The contractor's 2026 CGL (occurrence) | The bodily injury occurred in 2026; completed work is handled under the products-completed operations hazard |
| Owner's design claim, first made 2027 | The architect's professional liability policy in force in 2027 | The claim was made in 2027, and the policy's retroactive date must be before 2023 |
| Same design claim, if the architect retired in 2025 with no tail | Nothing | The policy ended before the claim was made |
The contractor's 2023 CGL would not respond to the 2026 injury; the 2026 policy does. Keep CGL policies from all years in your records, since a claim for progressive damage, such as a construction defect or ongoing water intrusion, can reach back across several years. Courts in different states use different rules to decide which years' occurrence policies respond to damage that spreads over time, for example the continuous-trigger approach California adopted in Montrose Chemical v. Admiral Insurance (1995). That is a legal question for coverage counsel, and the answer depends on the state.
Changing forms: three common situations
- Occurrence to claims-made. Set the retroactive date at the claims-made policy's inception date. Injury that occurred earlier is still covered by the old occurrence policies.
- Claims-made to occurrence. The old claims-made policy needs a tail for acts before the switch, because the new occurrence form will not look back at claims first made later.
- Claims-made carrier to claims-made carrier. Preserve the retroactive date or buy the tail. Confirm any "prior acts" promise in writing and check the application for a warranty about known circumstances.
Questions to ask at renewal
- Is each liability policy occurrence or claims-made, and what is the retroactive date on every claims-made one?
- Does the umbrella follow the primary's trigger, or could there be a mismatch between an occurrence primary and a claims-made excess?
- What is the extended reporting period offered, how long do we have to elect it, and what does it cost?
- Is there a notice-of-circumstances clause, and who in the company is responsible for using it?
- Are the old occurrence policies archived, with the carrier name, policy numbers and dates?
The tail coverage cost calculator helps compare the cost of a tail against a new carrier's prior acts offer.
Key takeaways
- Occurrence coverage follows when the injury happens; claims-made coverage follows when the claim is made and reported.
- Claims-made protection ends when you stop renewing it unless you keep the retroactive date or buy a tail.
- Check the retroactive date every time you change carriers, and confirm any promise of prior acts coverage in writing.
- Keep every old occurrence policy; they respond decades later to injury that happened in their year.