11.2 Occurrence vs. Claims-Made CGL and Retroactive Dates

Two Coverage Triggers, Two ISO Forms

The single most-tested distinction in commercial liability is the coverage trigger — the event that determines which policy period responds to a loss. The CGL is written on one of two ISO forms:

• CG 00 01 (Occurrence form) — coverage is triggered when the bodily injury or property damage occurs during the policy period, regardless of when the claim is reported.
• CG 00 02 (Claims-Made form) — coverage is triggered when the claim is first made against the insured during the policy period (or an applicable reporting period).

Occurrence coverage is far more common in general liability. Claims-made is standard for professional liability, D&O, and some products/pollution exposures with long-tail latency.

Occurrence vs. Claims-Made at a Glance

A frequent trap: on the occurrence form, when the claim is filed is irrelevant — a 2020 injury reported in 2026 is covered by the 2020 policy. On claims-made, the report year policy responds, subject to the retroactive date.

The Retroactive Date

The retroactive date on a claims-made policy is the date before which injury or damage is not covered — even if the claim is made during the current policy period. It exists to prevent buying coverage for already-known or already-occurred losses.

For a claims-made policy to respond, two conditions must both be met:

1. The injury or damage occurred on or after the retroactive date, and
2. The claim was first made during the policy period (or an active Extended Reporting Period).

If an insured maintains continuous claims-made coverage, the retroactive date should remain unchanged year to year (a "prior acts" or full retroactive coverage situation). Advancing the retroactive date to the current renewal date creates a dangerous gap for past acts — a common reason agents recommend tail coverage when switching carriers.

Worked Example: Will the Claims-Made Policy Respond?

An insured carries a claims-made CGL with a retroactive date of 01/01/2023 and a policy period of 01/01/2026 - 12/31/2026. Consider three losses, each producing a claim filed in March 2026:

• Loss A: injury occurred 06/15/2024 → Covered. Injury is after the retro date and the claim was made in-period.
• Loss B: injury occurred 09/10/2022 → NOT covered. The injury predates the 01/01/2023 retroactive date.
• Loss C: injury occurred 02/01/2026, but the claim is not filed until June 2027 → NOT covered under the 2026 policy unless an Extended Reporting Period is in force.

This illustrates the dual test: the date the injury occurred must clear the retroactive date, and the claim must be made within the coverage/reporting window.

Extended Reporting Periods (Tail Coverage)

When a claims-made policy is canceled or non-renewed, claims made after expiration would otherwise fall through the cracks. ISO provides Extended Reporting Periods (ERPs) to fill this gap:

• Basic (Automatic) ERP — supplied at no extra charge. It includes a short tail (claims made within 60 days after expiration for occurrences during the policy) and a mini-tail / midi-tail of five years for occurrences reported during the policy period via written notice.
• Supplemental ERP — must be purchased for an additional premium, must be requested within 60 days of policy termination, and provides an unlimited (lifetime) reporting tail for losses occurring after the retroactive date but before the policy ended.

Note the Basic ERP does not reinstate exhausted aggregate limits; the Supplemental ERP provides a fresh aggregate for the tail period. Occurrence forms need none of this — their tail is built in.

Why Claims-Made Was Created and the Laser/Trigger Logic

Claims-made forms emerged to solve the long-tail problem: with occurrence coverage, an insurer could face claims decades after a policy expired (asbestos, latent injury), making losses hard to reserve. A claims-made form responds when the claim is first made during the policy period and the injury occurred on or after the retroactive date, giving the insurer a defined window to reserve against.

The exam tests the two-prong trigger: a claim made during the period but arising from an injury before the retroactive date is not covered, and an injury during the period but reported after expiration (with no tail) is not covered. The fix for the second gap is an Extended Reporting Period — a basic mini-tail (automatic, e.g., 60 days to report / 5 years for occurrences) and an optional supplemental tail purchased for an unlimited reporting window.

Worked Trigger Example

Apply the two-prong test to a fact pattern: a claims-made policy runs 2026 with a retroactive date of 1/1/2024. A customer injured in 2025 files suit in 2026. Both prongs are met — the injury post-dates the retro date and the claim is made during the policy period — so the policy responds. Change the injury date to 2023 (before the retro date) and the same 2026 claim is denied, because the retroactive date excludes prior injuries. Drilling this date logic is the fastest way to earn claims-made points on the exam.