11.2 Occurrence vs. Claims-Made CGL and Retroactive Dates

The Coverage Trigger: The Most-Tested Distinction

The single most-tested concept in CGL liability is the coverage trigger - the event that obligates the policy to respond. ISO publishes two forms:

• CG 00 01 - Occurrence form. Responds when the bodily injury or property damage occurs during the policy period, no matter when the claim is filed.
• CG 00 02 - Claims-made form. Responds only when the claim is first made against the insured during the policy period (or its Extended Reporting Period).

Occurrence example. A 2024 occurrence policy. A customer slips in December 2024 but sues in 2026 - the 2024 occurrence policy responds because the injury occurred in 2024.

Retroactive Dates on Claims-Made Policies

A claims-made policy uses a retroactive date to set the earliest injury date it will cover. To trigger a claims-made policy, both conditions must be met:

1. the injury or damage must occur on or after the retroactive date, and
2. the claim must first be made during the policy period (or its ERP).

Worked example. A 2024 claims-made policy with a retroactive date of January 1, 2020:

• Claim made in 2024 for an injury that occurred in 2021 - covered (injury after retro date, claim in-period).
• Claim made in 2024 for an injury that occurred in 2019 - NOT covered (injury predates the retro date).

Trap: advancing or deleting a retroactive date on renewal can silently strip coverage for older exposures. A retro date should generally never move forward when a policy is renewed with the same carrier.

Occurrence vs. Claims-Made Triggers

The CGL is available on two coverage triggers, and distinguishing them is essential exam content. An occurrence policy responds to bodily injury or property damage that occurs during the policy period, no matter when the claim is later reported — even years after the policy expires. A claims-made policy responds only to claims first made against the insured during the policy period (or an extended reporting period), for injury occurring on or after the retroactive date.

Occurrence coverage is simpler and broader for the insured but harder for insurers to reserve against (long-tail "incurred but not reported" claims), while claims-made coverage gives insurers more predictable reserving and is common for long-tail exposures (pollution, professional liability). The exam tests which trigger responds to a given fact pattern based on when injury occurred versus when the claim was made.

Retroactive Dates, Tail Coverage, and the Claims-Made Maturity Steps

A claims-made policy has two critical date controls. The retroactive date is the earliest date of injury/occurrence for which a claim will be covered; injury before the retro date is never covered, even if the claim is made during the policy period. Pushing the retro date forward (or letting an insurer set a recent one) creates a coverage gap, so maintaining the original retro date when renewing or switching insurers is vital.

When claims-made coverage ends, tail coverage protects against claims made after expiration:

• A Basic Extended Reporting Period (BERP) is automatic and short (e.g., reports of occurrences already noticed, plus a brief window).
• A Supplemental Extended Reporting Period (SERP) must be purchased and provides an unlimited time to report claims for injury that occurred between the retro date and the policy's end.

Claims-made policies also mature through annual steps (first-year through mature), with rates rising as the exposure base of reportable years grows. Knowing that a retro date caps how far back coverage reaches, and that a purchased SERP/tail closes the gap when switching to occurrence coverage or retiring, covers the most-tested points.

Extended Reporting Periods (Claims-Made Only)

Because a claims-made policy only responds to claims reported during its term, switching carriers or letting a policy lapse can leave a gap for injuries that already happened but have not yet generated a claim. Extended Reporting Periods (ERPs), or "tails," close that gap.

• Basic ERP (the "mini-tail"). Automatic and free. It reports claims arising from occurrences before the end of the policy: an extra 60 days for any claim, plus 5 years for occurrences that were reported to the insurer during the policy or the 60-day window.
• Supplemental ERP (the "full tail"). Purchased by endorsement for an additional premium, it provides an unlimited reporting time. The insured must request it within 60 days of cancellation or non-renewal.

An ERP does not advance the retroactive date or provide new limits beyond what remains; it only extends the time to report claims for injuries that occurred on or after the retro date and before the policy ended.

Why Claims-Made Premiums "Step Up"

On a claims-made policy, the first-year premium is low because few prior years are exposed to claims. Each renewal applies an increasing step factor toward a mature premium - typically reached in year five - as more prior years (back to the retro date) become eligible to generate covered claims.

An occurrence premium is comparatively level because each annual policy stands alone for the injuries that happened in its period; the carrier prices one year of exposure each year.

Why occurrence is generally better for the insured. The built-in tail means no gap when switching carriers, and a single occurrence policy can pay claims decades later as long as the injury occurred in its period. Claims-made is used where long-tail exposure must be controlled (professional liability, products) but demands disciplined management of retroactive dates and ERPs to avoid gaps.