16.3 Occurrence vs Claims-Made, Limits, and CGL Exclusions
Key Takeaways
- CG 00 01 is occurrence-triggered: bodily injury or property damage must occur during the policy period. CG 00 02 is claims-made: the claim must be first made during the policy period (or ERP) for injury after the retroactive date.
- Most CGL is written on the occurrence form; professional liability is often claims-made and therefore depends on a retroactive date and a tail.
- The basic extended reporting period is automatic on a claims-made CGL; a supplemental ERP (tail) is optional, purchased, and much longer.
- Each occurrence, the general aggregate (Coverage A except PCO, plus B, plus C), and the products-completed operations aggregate are separate limit buckets; a premises claim and a products claim do not share one remaining aggregate.
- Additional insured endorsements grant insured status to another party for the named insured’s operations—ongoing operations while work is in progress, completed operations after the work is done. A certificate of insurance is not the grant.
16.3 Occurrence vs Claims-Made, Limits, and CGL Exclusions
Quick Answer: CG 00 01 is occurrence: the bodily injury or property damage happens during the policy period, even if the suit is filed years later. CG 00 02 is claims-made: the claim is first made during the policy period (or an extended reporting period), and the injury must be on or after the retroactive date. Most CGL is occurrence. Professional liability is often claims-made. Limits are a stack: each occurrence; general aggregate (Coverage A except products-completed operations, plus B, plus C); products-completed operations aggregate; personal and advertising injury limit; damage to premises rented to you; medical expense. Those two aggregates are separate buckets. Additional insured endorsements add someone else as an insured for the named insured’s ongoing operations or completed operations. A certificate is evidence, not the grant.
Occurrence versus claims-made
| Feature | Occurrence form CG 00 01 | Claims-made form CG 00 02 |
|---|---|---|
| Trigger | BI or PD occurs during the policy period | Claim first made against the insured during the policy period (or ERP) |
| When the suit arrives | Irrelevant to trigger if the injury was in the period | Central to trigger |
| Retroactive date | Not the occurrence-form engine | Injury must occur on or after the retroactive date |
| Need for a tail | Generally no—future claims still look back to the year the injury happened | Yes, if the insured cancels, nonrenews, switches to occurrence, or otherwise breaks the claims-made chain |
| Typical commercial use | CGL for premises, operations, products | Professional liability, D&O, EPL, many cyber and medical malpractice forms; CGL can be claims-made but usually is not |
Occurrence is why Harbor Grocers still wants the 2024 CGL file when a 2024 salsa injury is sued in 2026. The 2026 occurrence policy is looking for 2026 injuries, not late-arriving 2024 injuries.
Claims-made is why a retiring architect cannot simply stop buying professional liability. A claim made the year after the last policy ended, for a 2019 design error, has no policy unless an extended reporting period (ERP)—a tail—is in force, and unless the injury is after the retroactive date.
Retroactive date rules that matter on the exam:
- A retro date equal to this policy’s inception means no prior acts. Injury from last year is uncovered even if the claim is made this year.
- Keeping the same retro date when switching claims-made carriers preserves the prior-acts chain.
- A retro date of none (or the inception of the first claims-made policy in an unbroken series) is the more protective structure.
- Changing to a later retro date is a coverage giveaway.
Known injury or damage on the occurrence CGL is a related exclusion-condition: if any insured listed in Who Is an Insured knew, before the policy period, that BI or PD had occurred, Coverage A does not apply to later continuation of that same injury. Claims-made forms have their own prior litigation and known circumstances issues. Neither trigger deletes the Coverage A and B exclusions from 16.1 and 16.2. Pollution, auto, WC, expected/intended, and your-product still apply on both CG 00 01 and CG 00 02.
Tail / ERP: basic versus supplemental
When a claims-made CGL ends (cancel, nonrenew, replacement by a policy that is not claims-made for that injury, or a retro date that moves forward), ISO provides extended reporting periods so that claims first made after the end of the policy period can still attach to the expired claims-made form—if the injury was after the retro date and during the expired policy’s covered period. An ERP does not extend the policy period, does not change the retro date, and does not cover injury that happens after the policy ended. It is extra reporting time, not extra insurance years.
| ERP | How it arises | What it typically gives |
|---|---|---|
| Basic extended reporting period | Automatic, no extra premium, built into the claims-made form when the triggering termination/replacement events occur | A short mini-tail (ISO CGL classically 60 days) to report claims generally, plus a midi-tail (classically 5 years) for claims arising from occurrences reported to the insurer during the policy period or the 60-day window. It uses remaining limits; it does not reinstate aggregates |
| Supplemental extended reporting period (the purchased tail) | Optional endorsement; the insured must request it in writing within a short window (ISO CGL classically 60 days after the end of the policy period) and pay additional premium | An unlimited reporting period for qualifying claims. It starts when the policy ends and is much more than the basic ERP. It generally provides its own aggregate structure rather than leaving the insured with only leftover basic-ERP limits |
Most CGL buyers never buy a tail because they buy occurrence CGL. Professional liability buyers talk about tails at retirement, at a firm sale, and at a carrier switch. Do not tell an exam stem that “every CGL needs a tail.” Tell it that claims-made needs a reporting extension when the chain breaks, and that basic is automatic and limited while supplemental is optional, priced, and long.
The limit stack
ISO CGL Section III — Limits of Insurance points at the declarations. Typical commercial declarations look like this (illustrative, not mandated amounts):
| Limit | What it caps |
|---|---|
| Each occurrence | The most paid for the sum of Coverage A damages and Coverage C medical expenses because of all BI/PD from any one occurrence |
| General aggregate (other than products-completed operations) | The most paid for the sum of Coverage A damages except PCO, plus Coverage B, plus Coverage C, for the policy period |
| Products-completed operations aggregate | The most paid under Coverage A because of BI/PD in the PCO hazard for the policy period |
| Personal and advertising injury limit | The most paid under Coverage B for all personal and advertising injury sustained by any one person or organization |
| Damage to premises rented to you | A sublimit of Coverage A for damage to premises rented to the named insured (classically fire to the rented premises; later editions also address other specified perils). Often $100,000 on the declarations |
| Medical expense | The most paid under Coverage C because of BI sustained by any one person. Often $5,000—again a common CGL limit, not a law |
Defense under supplementary payments is typically outside these limits until indemnity uses them up. Damage to premises rented to you is why a tenant who negligently burns the landlord’s suite may have a small fire-legal CGL grant instead of the full occurrence limit—and why that tenant still needed Assignment 2’s property discussion for the tenant’s own BPP, not the landlord’s building.
Worked numbers: two claims, two aggregates
Harbor Grocers, unendorsed CG 00 01, policy period January 1–December 31:
- Each occurrence: $1,000,000
- General aggregate: $2,000,000
- Products-completed operations aggregate: $2,000,000
- Personal and advertising injury: $1,000,000
- Damage to premises rented to you: $100,000
- Medical expense: $5,000
Claim 1 — March slip-and-fall (premises and operations). The insurer pays $800,000 in Coverage A damages to the shopper. Defense costs $110,000.
- Defense is supplementary and does not reduce the occurrence limit or either aggregate.
- $800,000 reduces the each-occurrence capacity for this occurrence (up to $1,000,000) and reduces the general aggregate to $1,200,000.
- The PCO aggregate remains $2,000,000. Premises claims do not live in that bucket.
Claim 2 — August product injury (PCO). A salsa claimant takes a $1,400,000 judgment for BI that occurred during the period, away from the store, after sale.
- This is a different occurrence, so a fresh $1,000,000 each-occurrence cap applies.
- The insurer pays $1,000,000, not $1,400,000. The remaining $400,000 is the insured’s problem or an umbrella / excess problem.
- The payment reduces the products-completed operations aggregate to $1,000,000.
- The general aggregate is still $1,200,000. PCO did not raid it.
| Bucket after both payments | Remaining |
|---|---|
| General aggregate | $1,200,000 |
| Products-completed operations aggregate | $1,000,000 |
| Each occurrence (as a rule, not a remaining bank) | Still $1,000,000 for the next unrelated occurrence, subject to whichever aggregate applies |
If a third event is another premises fall for $1,000,000, the general aggregate can pay it ($1,200,000 is enough) and then drop to $200,000. If instead a second product claim needs $1,000,000, the PCO aggregate can still pay it. If a third product claim then arrives, the PCO aggregate is gone even though the general aggregate still shows $1,200,000. That is the entire point of two aggregates.
A Coverage B libel payment would hit the personal and advertising injury limit for that person/organization and the general aggregate, not the PCO aggregate. A $5,000 lobby medical-payments draft hits medical expense, each occurrence, and the general aggregate.
Additional insureds: ongoing versus completed operations
Commercial contracts routinely demand that the named insured add someone else as an additional insured (AI) on the CGL: a landlord on a tenant’s policy, a general contractor on a subcontractor’s policy, a project owner on a GC’s policy. The grant is an endorsement, not a sentence on a certificate of insurance. The certificate can be wrong, expired, or silent on completed operations. The endorsement is the contract of insurance.
Conceptually:
- Ongoing operations AI coverage applies while the named insured is performing operations (or, for a tenant, in connection with occupancy). A passerby is hurt by a subcontractor’s ladder during the build. The GC who required AI status wants to share the sub’s CGL for that in-progress exposure.
- Completed operations AI coverage applies after the named insured’s work is complete. The same railing, accepted and in use, fails a year later and injures a visitor. The GC still wants to be an insured on the sub’s CGL for that completed-work claim. An ongoing-operations-only endorsement does not do that job.
ISO has long used scheduled owner/lessee/contractor additional-insured endorsements for this split. Later editions of the common ongoing operations form do not silently include completed operations; a completed operations AI endorsement is the usual companion when the contract demands both. AINS will not grade you as an endorsement-number clerk. It will grade you for knowing that ongoing and completed are different grants, that AI status follows the named insured’s covered operations (and is still subject to CGL exclusions), and that “we are additional insureds” on a certificate is not proof that completed operations was actually added.
AI endorsements also interact with other insurance, primary and noncontributory wording, and waiver of subrogation. Those are endorsement mechanics. They do not turn the CGL into the additional insured’s professional liability, auto, or workers compensation policy.
Exclusions still sit on top of trigger and limits
Trigger and limits never rehabilitate an excluded claim:
- A claims-made CGL still excludes auto, pollution, WC, and expected/intended injury.
- An occurrence CGL with plenty of aggregate left still will not pay damage to your product or a recall.
- Adding a GC as additional insured does not buy the GC coverage for its own unrelated operations, for professional design error, or for the sub’s employee (WC).
- Damage to premises rented to you is a sublimit, not a reason to ignore the owned-property exclusion on the rest of the building the insured owns (that building was Assignment 2).
The commercial account that actually closes the holes uses CGL + commercial auto + workers compensation + property, and then umbrella, professional, pollution, liquor, or cyber when the exclusions say so. Assignment 4 is those other commercial policies.
Exam traps in this section
- Occurrence = when BI/PD happens. Claims-made = when the claim is made, after the retro date.
- Most CGL is occurrence; do not put a tail on CG 00 01 as if it were professional liability.
- Basic ERP is automatic and limited; supplemental ERP is the purchased unlimited tail.
- General aggregate and PCO aggregate are separate. A big products payment does not zero the premises aggregate.
- Each occurrence still caps any one event even when an aggregate shows $2 million.
- Defense typically outside limits until indemnity exhausts them.
- Additional insured: ongoing ≠ completed; certificate ≠ endorsement.
A toy causes bodily injury in 2024. The parents first sue in 2026. The manufacturer had an unendorsed ISO occurrence CGL (CG 00 01) in 2024 and a different insurer’s occurrence CGL in 2026. Which policy is designed to respond to that injury?
An insured is coming off a claims-made CGL (CG 00 02) that is not being replaced by another claims-made CGL. Which statement best describes extended reporting periods?
An unendorsed ISO occurrence CGL shows $1 million each occurrence, $2 million general aggregate, and $2 million products-completed operations aggregate. In the same period the insurer pays $800,000 for a store slip-and-fall and $1 million (capped by the each-occurrence limit) for a product that injures a user away from the premises. Defense costs on the slip-and-fall were $100,000. What remains?
A general contractor requires a subcontractor’s ISO CGL to add the GC as an additional insured. The sub’s work is finished and accepted. A year later a visitor is injured when a railing the sub installed fails. Which statement is most accurate?