11.2 Occurrence vs. Claims-Made CGL and Retroactive Dates

Two Forms, Two Triggers

ISO writes the CGL on two forms. The occurrence form, CG 00 01, responds when the injury or damage occurs during the policy period - regardless of when the claim is eventually filed. The claims-made form, CG 00 02, responds when the claim is first made during the policy period (subject to a retroactive date). The trigger is the single most-tested distinction in the entire CGL chapter.

Reading the Occurrence Trigger

Under an occurrence policy, the only question is when did the injury or damage happen. If it happened during the policy period, that policy responds even if the lawsuit arrives a decade later.

Worked example. A 2024 occurrence policy is in force January 1-December 31, 2024. A customer slips and is hurt in December 2024 but does not sue until 2026. The 2024 occurrence policy responds because the injury occurred in 2024; the 2026 filing date does not matter and the insured's current (2026) policy is not involved.

Trap. Do not be fooled by a late filing date. The occurrence form ignores filing dates entirely - it cares only about the date of the injury-causing event.

Reading the Claims-Made Trigger and the Retroactive Date

The claims-made form pays only when both conditions are met: (1) the injury occurred on or after the retroactive date, and (2) the claim is first made during the policy period (or during an ERP). The retroactive date is the bright line - injuries before it are never covered, no matter when claimed.

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

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

Trap. Watching only the claim date misses the retroactive-date test. A perfectly timed claim still fails if the underlying injury predates the retro date.

The Claims-Made Trigger and Its Dates

The CGL claims-made form (CG 00 02) responds only to claims first made during the policy period, and it adds two critical dates the occurrence form lacks:

• Retroactive date — injury must occur on or after this date; injuries before it are never covered, even if the claim arrives during the period.
• Extended Reporting Period (tail) — after the policy ends, lets the insured report claims for occurrences during the term. A Basic (automatic) tail gives a limited window (a 60-day reporting window for claims, plus a 5-year window for occurrences reported late), and a Supplemental tail is purchased for an unlimited reporting window.

Why Insurers Use Claims-Made

Worked Trigger Scenario

A manufacturer's product injures a user in 2023; the claim is filed in 2026. The occurrence policy in force in 2023 responds. A claims-made policy responds only if a policy is in force in 2026 and the 2023 injury is on or after the retroactive date — otherwise the insured needs the tail. The exam stresses that a buyer switching from claims-made to a new carrier must protect the retroactive date or buy tail coverage, or a gap will swallow past-act claims — the single most consequential CGL purchasing decision.

Extended Reporting Periods (Claims-Made Only)

Because a claims-made policy stops responding once the period ends, the insured needs a tail to cover claims reported late for injuries that occurred while the policy was active. ISO provides two ERPs:

• Basic ERP (the mini-tail): automatic and free. It reports claims for 60 days after expiration for occurrences not yet reported, plus a longer window (5 years) for occurrences already reported during the policy.
• Supplemental ERP (the full tail): purchased by endorsement, providing unlimited reporting time. It must be requested within 60 days of cancellation or non-renewal.

Why occurrence forms need no ERP. The occurrence form's tail is built in - because it triggers on the injury date, a claim reported years later is automatically covered by the policy that was in force when the injury happened.

Why the Two Forms Are Priced So Differently

A claims-made policy's first-year premium is low because few prior years are exposed. Each renewal applies a step factor that increases the premium as more prior years come into the coverage window, until roughly year five when the policy reaches a mature premium reflecting full prior-acts exposure.

An occurrence premium is comparatively level because each policy stands alone for the injuries that happened in its year. Occurrence is generally better for the insured (no gap when switching carriers), while claims-made is used where long-tail exposure must be controlled - notably professional and products lines - but it demands careful management of retroactive dates and ERPs to avoid coverage gaps.