11.2 Occurrence vs. Claims-Made CGL and Retroactive Dates
Key Takeaways
- The Occurrence form triggers on injury during the policy period regardless of when reported; the Claims-Made form triggers when the claim is first made.
- Claims-made coverage requires the injury to occur on or after the Retroactive Date and the claim to be reported during the policy period or ERP.
- Advancing the Retroactive Date narrows coverage; matching retro dates when switching carriers prevents gaps.
- Basic ERP is automatic and limited; Supplemental ERP is purchased, must be requested within 60 days, and is unlimited in duration.
Occurrence vs. Claims-Made CGL and Retroactive Dates
The CGL comes in two trigger versions: the Occurrence form (CG 00 01) and the Claims-Made form (CG 00 02). The coverage trigger determines which policy responds to a loss. Exam questions test timing scenarios where the injury, the policy period, and the date a claim is reported differ, so you must know exactly what 'triggers' each form.
The Occurrence Trigger
Under the Occurrence form, coverage is triggered by bodily injury or property damage that occurs during the policy period, regardless of when the claim is later reported. A claim filed five years after the policy expires is still covered if the injury happened while the policy was in force. This makes occurrence coverage attractive for long-tail exposures (e.g., latent injury), but it creates 'stacking' of multiple policy years and long-tail reserving challenges for insurers.
The Claims-Made Trigger
Under the Claims-Made form, coverage is triggered when the claim is first made against the insured during the policy period (or during an extended reporting period), provided the injury occurred on or after the Retroactive Date and before the end of the policy period. Two timing conditions must both be satisfied:
- The injury occurred on or after the Retroactive Date.
- The claim was first made during the policy period (or applicable ERP).
If either fails, the claims-made policy does not respond.
Retroactive Date and Trigger Comparison
The Retroactive Date is the earliest date an injury can have occurred and still be covered. Injuries before the retro date are excluded even if the claim is made during the policy period. Advancing (moving forward) the retro date narrows coverage and is a major red flag for insureds.
| Feature | Occurrence (CG 00 01) | Claims-Made (CG 00 02) |
|---|---|---|
| Trigger | Injury occurs during policy period | Claim first made during policy period |
| Report timing | Any time, even after expiration | Must be reported during policy/ERP |
| Retroactive Date | None | Required; bars pre-retro injuries |
| Long-tail exposure fit | Strong | Needs ERP / tail coverage |
| Coverage gaps on switching | Rare | Common without matching retro date |
Occurrence vs. Claims-Made CGL and Retroactive Dates
The CGL is offered in two trigger forms, and choosing between them is a core commercial-lines skill:
| Feature | Occurrence CGL (CG 00 01) | Claims-Made CGL (CG 00 02) |
|---|---|---|
| Trigger | BI/PD occurs during the period | Claim first made during the period |
| Retroactive date | None | Required; bars pre-retro occurrences |
| Tail / ERP | Not needed | Basic + supplemental ERP available |
| Best for | Most general liability risks | Long-tail/latent exposures, hard markets |
A claims-made policy uses the retroactive date to set the earliest covered occurrence and an Extended Reporting Period to capture claims reported after expiration. The basic ERP automatically grants a short window (e.g., 60 days to report, 5 years for occurrences already reported); the supplemental ERP is purchased for an unlimited reporting window.
Exam trap: When moving from claims-made to a new carrier, the insured must either obtain a matching/earlier retroactive date on the new policy (covering prior acts - "nose" coverage) or buy a tail (ERP) on the old policy - otherwise a coverage gap opens for old occurrences reported later. Advancing the retroactive date wipes out coverage for everything before the new date, a frequently tested trap when renewing claims-made policies.
Step-Down Provisions and Choosing the Right Trigger
Claims-made policies sometimes contain step factors in early "maturity" years (first-year, second-year, third-year, then mature), pricing the limited exposure of a brand-new claims-made program. As the policy matures, more prior years are exposed and the premium rises toward the mature rate. Producers must counsel insureds that dropping a claims-made policy without buying tail coverage leaves long-tail claims uninsured.
Exam tip: The safest renewal practice for claims-made coverage is to keep the original retroactive date year after year, preserving coverage for all prior acts during the relationship. The two ways to avoid a gap when changing carriers are (1) a tail (ERP) on the expiring policy or (2) prior-acts (nose) coverage with a matching retroactive date on the new policy. Occurrence forms avoid all of this complexity but are not always available for long-tail professional and pollution exposures.
A claims-made CGL has a Retroactive Date of 1/1/2024 and a policy period of 1/1/2026 to 1/1/2027. A bodily-injury event occurred 6/1/2023, but the claim was first made against the insured on 3/1/2026. Does this policy respond?
Extended Reporting Periods (Tail Coverage)
Because claims-made coverage ends when the policy ends, the insured needs an Extended Reporting Period (ERP), or 'tail,' to report claims after expiration for injuries that occurred during the policy term. ISO provides two:
- Basic (Automatic) ERP: Free, automatic. Provides a short window (commonly 60 days) to report claims arising from occurrences known and reported, plus a longer five-year mini-tail for occurrences reported within 60 days of policy end.
- Supplemental ERP: Purchased by endorsement, must be requested in writing within 60 days of termination, and provides an unlimited reporting period for covered occurrences before the policy ended.
Why Retro Dates Matter When Switching Insurers
When an insured moves from one claims-made carrier to another, the new policy should carry the same Retroactive Date as the prior policy to avoid a coverage gap. If the new insurer advances the retro date to the new policy's inception, injuries that occurred under the prior policy but are reported later may fall into a gap: too late for the old policy (expired) and barred by the new retro date. The standard solutions are to negotiate a matching retro date or to purchase a supplemental ERP/tail on the expiring policy.
A matching strategy on the front end is 'nose' (prior-acts) coverage; a tail on the back end is the ERP.
An insured is moving from one claims-made CGL to another. What is the most important step to prevent a coverage gap for losses that occurred under the expiring policy but are reported later?