Occurrence vs. Claims-Made CGL and Retroactive Dates

Two Coverage Triggers, Two Forms

ISO publishes the CGL in two trigger formats. The Occurrence form (CG 00 01) responds when bodily injury or property damage occurs during the policy period, no matter when the claim is reported - even years later. The Claims-Made form (CG 00 02) responds only when a claim is first made against the insured during the policy period (or an applicable extended reporting period), provided the injury occurred on or after the retroactive date.

The coverage trigger is the single most tested casualty concept because it determines which policy year pays. On an occurrence form the date of injury controls; on a claims-made form the date the claim is reported controls.

Occurrence vs. Claims-Made at a Glance

A claims-made policy is cheaper early because the insurer's exposure is limited by the retroactive date, but it requires careful management of the retro date and an extended reporting period at expiration.

The Retroactive Date

The retroactive date on a claims-made policy is the date on or after which the injury or damage must occur to be covered. Injury that occurs before the retroactive date is excluded even if the claim is made during the policy period. Advancing (moving forward) the retroactive date creates a coverage gap, so doing so triggers the insured's right to buy an extended reporting period.

Three retro-date scenarios are tested constantly:

• No retroactive date entered: all prior injury is potentially covered (most generous - retro date is effectively unlimited).
• Retroactive date = policy inception: only injury occurring during the policy term is covered (first-year claims-made buyer).
• Retroactive date advanced at renewal: prior coverage is cut off, creating a gap unless tail coverage is purchased.

Extended Reporting Periods (Tail Coverage)

When a claims-made policy is cancelled, not renewed, or its retroactive date is advanced, the insured needs an Extended Reporting Period (ERP) to cover claims reported after the policy ends for injuries that happened during the policy term. ISO provides two:

• Basic Tail (automatic): added at no charge. It gives a short window - 60 days for claims arising from any occurrence reported to the insurer, and 5 years for claims arising from occurrences already reported during the policy period. It is supplemental automatic coverage.
• Supplemental Tail (optional): purchased by endorsement (CG 27 01) within 60 days of policy end. It is unlimited in duration and reinstates an aggregate limit. The insured pays a premium (often up to 200 percent of the expiring annual premium).

The ERP does not increase or extend coverage beyond the original limits except where the supplemental tail reinstates the aggregate.

Worked Example - Which Policy Pays?

A product the insured made caused injury on March 1, 2024. The claim is filed June 1, 2026.

• Occurrence form: The 2024 policy pays, because injury occurred during its period - the late report does not matter.
• Claims-made form, retro date Jan 1, 2024, policy renewed continuously: The current (2026) policy pays, because the claim is first made in 2026 and the injury date (Mar 1, 2024) is on or after the retroactive date.
• Claims-made form cancelled Dec 31, 2025, no tail purchased: No coverage. The claim is made after the policy ended and no ERP was bought - the textbook gap that drives the need for tail coverage.

Tracing the injury date against the retroactive date, then the claim date against the policy period, is the exact two-step the exam expects.

Occurrence vs. Claims-Made Triggers and the Tail

The CGL is sold on two triggers, and distinguishing them is among the most tested casualty concepts. An occurrence form responds to bodily injury or property damage that takes place during the policy period, no matter when the claim is later reported — coverage is locked in by the date of injury, which is why an occurrence policy provides a long tail by its nature. A claims-made form responds only to claims first made against the insured during the policy period (or an extended reporting period), provided the injury occurred on or after the retroactive date.

Claims-made introduces machinery the exam loves. The retroactive date bars coverage for injury before it. A Basic Extended Reporting Period (ERP) is automatic and short (commonly 60 days to report claims, plus a 5-year window for occurrences reported as potential claims during the policy). A Supplemental ERP ('tail') must be purchased, usually within 60 days of expiration, and provides an unlimited reporting window for occurrences before the end date.

Laddering claims-made policies year to year with a stable retroactive date avoids gaps; moving to an occurrence form or letting the retro date advance creates the coverage holes examiners build their questions around.