11.2 Occurrence vs. Claims-Made CGL and Retroactive Dates

Two Coverage Triggers, Two Forms

ISO publishes the CGL in two trigger versions: the Occurrence form (CG 00 01) and the Claims-Made form (CG 00 02). The trigger is the event that activates coverage. Choosing the right form - and reading the dates on the declarations - decides whether a claim is covered. This is the most logically demanding concept on the national exam, and questions almost always hinge on date math.

The two forms are otherwise nearly identical in their insuring agreements and exclusions. What differs is the timing rule that determines which policy responds.

Occurrence Trigger

An occurrence policy covers bodily injury or property damage that takes place during the policy period, no matter when the claim is finally reported. If the harmful event happens while the policy is in force, that policy responds even if the claim arrives years later.

This is ideal for long-tail exposures (latent injury, slow property damage) because coverage is locked in by the date of injury. The downside for insurers is the "long tail" of unknown future claims, which makes occurrence pricing more uncertain.

Claims-Made Trigger and the Retroactive Date

A claims-made policy covers a claim only if both conditions are met:

1. The injury or damage occurred on or after the retroactive date shown on the declarations, and
2. The claim is first made against the insured during the policy period (or any applicable extended reporting period).

The retroactive date is the earliest injury date the policy will cover. Anything before it is excluded permanently. Insurers like claims-made because the "tail" is cut off - they know within the policy year roughly what they owe.

Worked Example - Trigger Date Math

An insured carries a claims-made CGL with a retroactive date of 01/01/2024 and a policy period of 01/01/2026 to 01/01/2027. Test each scenario:

• Injury 06/2025, claim made 03/2026: Injury is after the retro date (01/01/2024) AND claim is first made during the period. Covered.
• Injury 11/2023, claim made 03/2026: Claim is during the period, but the injury predates the retro date. NOT covered.
• Injury 06/2026, claim made 02/2027: Injury is fine, but the claim is made after the period ends with no ERP purchased. NOT covered (would be covered under an extended reporting period).

Now flip to an occurrence policy for 01/01/2026 - 01/01/2027:

• Injury 06/2026, claim made 02/2030: The injury happened during the policy period, so this policy responds no matter how late the claim arrives. Covered.

Extended Reporting Periods (Tail Coverage)

When a claims-made policy ends or the retro date is advanced, the insured needs an Extended Reporting Period (ERP) to cover claims reported after expiration for pre-expiration injuries:

• Basic (Mini) Tail: Automatic, no charge. A short window (commonly 60 days to report, 5 years for claims arising from injuries reported during a 60-day notice window) for claims arising from occurrences already known.
• Supplemental (Full) Tail: Must be purchased, available for an unlimited reporting window, premium typically capped (often up to ~200% of the expiring annual premium under ISO rules).

Advancing the retroactive date is functionally a coverage cutback and is one reason regulators scrutinize claims-made renewals.

Claims-Made Maturity Steps

A claims-made program does not stand still - it "matures" over its first several years. In year one the retroactive date equals the inception date, so the policy covers only injuries during that single year. Each renewal keeps the original retro date while extending the period, so the coverage window grows: year two covers two years of injuries, year three covers three, and so on.

This matters for pricing and for the exam's switching questions. A first-year claims-made policy is cheaper than an equivalent occurrence policy precisely because it covers a thin slice of exposure; a fifth-year "mature" claims-made policy approaches occurrence pricing because its coverage window is now wide.

Switching Between Forms - The Gap Trap

Moving from occurrence to claims-made, or between two claims-made insurers, is where coverage gaps appear. When a new claims-made insurer sets the retroactive date to the new inception date, every injury before that date becomes uninsured - so the buyer must negotiate to carry the prior retro date forward ("full prior acts" or "nose" coverage).

Going the other way - from claims-made to occurrence - the buyer should purchase a supplemental ERP (tail) on the expiring claims-made policy to catch late-reported claims for old injuries, because the new occurrence policy only responds to injuries that happen after its inception. Recognizing which side needs nose coverage and which needs tail coverage is a classic exam discriminator.

Five Claims-Made Concepts in One Place

1. Retroactive date — injuries before it are never covered.
2. Claim first made in the policy period (plus injury on/after retro) triggers coverage.
3. Maturity — keeping the retro date fixed across renewals widens the covered window.
4. Basic (mini) tail — automatic, short reporting extension at expiration.
5. Supplemental tail (ERP) — purchased, unlimited time to report past-act claims.

Switching Forms Without a Gap

Moving from claims-made to occurrence: buy a tail on the expiring claims-made policy so late-reported past claims are covered (the new occurrence policy only covers injuries occurring on/after its start). Moving from occurrence to claims-made: set the new policy's retroactive date to the occurrence policy's inception so prior injuries newly claimed are picked up. The exam tests which direction needs a tail (leaving claims-made) versus a matching retro date (entering claims-made).