11.2 Occurrence vs. Claims-Made CGL and Retroactive Dates

Two Coverage Triggers, One Form Family

ISO publishes the CGL in two trigger versions: the occurrence form (CG 00 01) and the claims-made form (CG 00 02). The coverage trigger is the event that decides which policy year responds to a loss. Choosing the wrong trigger on the exam is a frequent error because the two forms look similar but respond on completely different timelines.

• Occurrence trigger: the policy in force when the bodily injury or property damage takes place responds, even if the claim is filed years later.
• Claims-made trigger: the policy in force when the claim is first made against the insured responds, provided the injury happened on or after the Retroactive Date.

Occurrence forms are simpler and dominate small-business CGL. Claims-made forms are used for long-tail exposures (products, professional-style risks) where injuries may surface decades after the act, because the insurer can better estimate its ultimate liability.

The practical consequence is stacking. Under an occurrence form, an injury that happened in 2018 but is sued upon in 2026 reaches back to the 2018 policy and its limits, so an insured may stack many old policies to find available coverage. Under a claims-made form, that same 2026 suit looks only to the policy active in 2026, so there is no stacking of old aggregates. This is why occurrence forms carry more uncertainty for insurers and claims-made forms price long-tail risk more accurately.

The Retroactive Date and the Trigger Window

The Retroactive Date is the linchpin of the claims-made form. Injury or damage that occurs before the Retroactive Date is never covered, no matter when the claim is made. Injury that occurs on or after the Retroactive Date and is claimed during the policy period (or an extended reporting period) is covered.

Moving the Retroactive Date forward (advancing it) shrinks coverage and is treated like a reduction in coverage that triggers notice requirements. The exam loves the trap of a claim for injury that occurred one day before the Retroactive Date: it is denied even though a current policy is in force.

When a claims-made policy is first written, the Retroactive Date usually equals the inception date, meaning no prior acts are covered (often called a 'first-year' or laser policy). On each renewal the insured normally keeps that original Retroactive Date so the covered window keeps growing. ISO also offers transition rules so that an account moving from occurrence to claims-made does not double-pay or leave a gap. The Retroactive Date can never be set later than the policy inception, and advancing it on renewal is treated as a material reduction requiring advance written notice to the insured.

Extended Reporting Periods (Tail Coverage)

Because a claims-made policy stops responding once it expires, an insured who switches carriers or retires needs Extended Reporting Periods (ERPs), commonly called tail coverage, to report claims after the policy ends. ISO builds two ERPs into the claims-made CGL:

• Basic ERP (automatic tail): provided at no extra charge. It includes a mini-tail of ~60 days to report claims for injuries already known, plus a ~5-year tail for incidents reported during the policy that later become claims.
• Supplemental ERP (purchased tail): bought by endorsement for an additional premium, it provides an unlimited reporting period for covered injuries that occurred after the Retroactive Date.

The Supplemental ERP must usually be requested in writing within 60 days of policy termination. ERPs do not increase limits; they extend the time to report, using the limits of the expiring policy.

The Basic ERP is sometimes split into a short tail (the ~60-day window to report any new claim) and a midi-tail (the ~5-year window for incidents the insured already noticed and reported during the policy term). The Supplemental ERP overrides both with an unlimited reporting window. Because the Supplemental ERP shares the expiring policy's aggregates, a heavy claim year can leave little tail coverage available, so applicants should not assume a tail equals fresh limits.

Avoiding Coverage Gaps When Switching Forms

Gaps appear when an insured moves between forms or carriers without aligning the Retroactive Date. Best practices the exam rewards:

• Keep the same Retroactive Date when renewing or replacing a claims-made policy so older injuries stay covered.
• Buy a Supplemental ERP when ending a claims-made program with no successor coverage, or require the new carrier to grant prior-acts (nose) coverage back to the original Retroactive Date.
• Moving from claims-made to occurrence creates double coverage for new injuries but can leave late-reported old claims uncovered without a tail.

Quick math on tail need

If a contractor carried claims-made coverage 2019-2026 with a 2019 Retroactive Date and retires, a latent injury from 2022 reported in 2028 is only covered if a Supplemental ERP (unlimited tail) was purchased; the ~60-day basic mini-tail would have expired in early 2026.