Occurrence Trigger & Claims-Made CGL Options
Key Takeaways
- The standard CGL is an occurrence form, responding when the injury or damage takes place during the policy period regardless of claim date.
- A claims-made CGL responds only when the claim is first made during the policy period and the injury occurred on or after the retroactive date.
- The claims-made CGL includes a basic extended reporting period automatically and offers a supplemental (purchased) tail.
- Businesses prefer occurrence coverage for certainty; switching triggers or insurers requires watching the retroactive date and possibly buying a tail.
The CGL Coverage Trigger
The standard CGL is an occurrence form, but a claims-made version exists, and the exam tests both. The trigger determines which policy year answers a claim, which matters most for long-tail exposures such as products liability and pollution where harm appears years after the act.
| CGL form | Responds when |
|---|---|
| Occurrence | Bodily injury or property damage takes place during the policy period |
| Claims-made | The claim is first made during the policy period, subject to a retroactive date |
Occurrence CGL
The occurrence CGL responds when the bodily injury or property damage occurs during the policy period, regardless of when the claim is reported. The defining term, occurrence, means an accident, including continuous or repeated exposure to substantially the same harmful conditions. For injury that develops over time (a slow leak, repeated exposure to a substance), the occurrence form treats the continuous exposure as one occurrence and responds based on when the injury took place, which can implicate multiple policy years.
Claims-Made CGL
The claims-made CGL responds only when a claim is first made during the policy period and the injury occurred on or after the retroactive date. It uses the same devices as claims-made professional liability: the retroactive date sets the earliest covered injury date, and the extended reporting periods allow post-policy reporting.
The CGL claims-made form provides a Basic Extended Reporting Period automatically (a short tail, often including a 60-day window to report claims and a longer mini-tail for occurrences reported during the policy) and offers a Supplemental Extended Reporting Period for purchase, which provides an unlimited reporting window for prior covered occurrences.
Why a Business Would Choose Each
Most businesses prefer the occurrence CGL because it provides certainty: once a policy year covers an injury, that coverage is locked in regardless of when the claim arrives, and there is no need to maintain a tail. Insurers sometimes require claims-made for volatile, long-tail exposures so they can re-underwrite annually. A business switching from occurrence to claims-made, or between claims-made insurers, must watch the retroactive date and may need a tail to avoid a gap for prior acts not yet claimed.
Applying the Trigger on the Exam
The exam gives an injury date, a claim date, a policy period, and (for claims-made) a retroactive date, then asks whether coverage applies. For an occurrence CGL, ask only whether the injury occurred during the policy period. For a claims-made CGL, ask whether the claim was first made during the policy period and whether the injury occurred on or after the retroactive date, and whether a tail covers a post-policy claim.
The same trigger logic from the liability-concepts chapter applies here, now in the commercial context, and recognizing whether the CGL in a scenario is occurrence or claims-made is the first step in answering correctly, because the same facts can produce opposite coverage outcomes depending on the trigger.
A claims-made CGL has a retroactive date of January 1, 2024. An injury occurs on June 1, 2023, but the claim is first made on March 1, 2026, while the policy is in force. Is the injury covered?
Why do most businesses prefer an occurrence CGL over a claims-made CGL?
Choosing and Applying the CGL Trigger
The standard CGL is an occurrence form, but a claims-made version exists, and recognizing which a scenario uses is the first step. The occurrence form responds when bodily injury or property damage takes place during the policy period, regardless of when the claim is reported, which gives the insured certainty and avoids the need for tail coverage. The claims-made form responds only when the claim is first made during the policy period and the injury occurred on or after the retroactive date.
The claims-made CGL provides a Basic Extended Reporting Period automatically and offers a Supplemental Extended Reporting Period for purchase. Businesses switching from occurrence to claims-made, or between claims-made insurers, must watch the retroactive date and may need a tail to avoid a gap for prior acts not yet claimed.
| Trigger | Decisive event |
|---|---|
| Occurrence | Injury during the policy period |
| Claims-made | Claim made in period; injury ≥ retroactive date |
| Basic ERP | Built-in short tail |
| Supplemental ERP | Purchased, longer tail |
Most businesses prefer the occurrence form because coverage locks in once a policy year covers the injury. Insurers may require claims-made for volatile, long-tail exposures (products, pollution) so they can re-underwrite annually. A worked case: a claims-made CGL with a 2024 retroactive date will not cover a 2023 injury even if claimed in 2026, because the injury predates the retroactive date. When a trigger scenario gives dates, identify the form, then apply the occurrence test (injury date) or the claims-made test (claim date plus retroactive date plus tail) to reach the answer.
Identify whether the CGL is occurrence or claims-made before applying the trigger, because the same dates can produce opposite outcomes. Occurrence coverage responds when the injury takes place during the policy period regardless of the claim date, giving certainty and avoiding the need for a tail. Claims-made coverage responds only when the claim is first made during the period and the injury occurred on or after the retroactive date, with a built-in basic extended reporting period and a purchasable supplemental tail.
An injury before the retroactive date is excluded even if claimed during the term, so a business switching coverage must watch that date.