8.3 Occurrence vs. Claims-Made Triggers
Key Takeaways
- An occurrence policy (CG 00 01) responds when injury takes place during the policy period, regardless of when the claim is filed.
- A claims-made policy (CG 00 02) responds when the claim is first made and reported during the period, governed by the retroactive date.
- Injury before the retroactive date is never covered on a claims-made form, even if the claim is made during the period.
- Extended Reporting Periods provide tail coverage: a free basic (mini-tail) and a purchased supplemental (maxi-tail) with unlimited reporting.
- Claims-made forms suit long-tail exposures (professional, products) and start cheaper before maturing; occurrence forms suit short-tail premises risks.
Occurrence vs. Claims-Made Triggers
A coverage trigger determines which policy responds when a liability claim spans more than one policy period — critical for long-tail exposures like products liability and professional malpractice where injury and lawsuit may be years apart. The CGL is offered on two trigger forms: the occurrence form (CG 00 01) and the claims-made and reported form (CG 00 02). Knowing the difference, and the dates that matter, is among the most heavily tested casualty topics.
Occurrence trigger
An occurrence policy covers injury or damage that takes place during the policy period, no matter when the claim is filed — even years after the policy expires. The triggering event is the date of the occurrence (defined as an accident, including continuous or repeated exposure to substantially the same harmful conditions). This is simpler for the insured and the broader of the two forms, but it exposes the insurer to claims that surface long after the policy ends, complicating reserving.
Claims-made trigger
A claims-made policy covers a claim only if it is first made against the insured during the policy period (the modern ISO form also requires it be reported during the period or an extension). Two dates govern coverage:
- Retroactive date — the earliest date an occurrence can take place and still be covered. Injury before the retro date is never covered, even if the claim is made during the period.
- Expiration date — the latest date a claim can be made under the policy itself.
Moving or advancing the retro date can create a dangerous coverage gap.
Side-by-side comparison
| Feature | Occurrence form (CG 00 01) | Claims-made form (CG 00 02) |
|---|---|---|
| Trigger | Injury occurs during policy period | Claim first made (and reported) during period |
| Key date | Date of occurrence | Retroactive date + claim date |
| Best for | Short-tail, premises/operations | Long-tail, professional, products |
| Tail/runoff needed at expiration? | No | Yes — extended reporting periods |
| Premium pattern | Higher early, stable | Lower early, rises to "mature" |
Extended Reporting Periods (tail coverage)
Because a claims-made policy stops responding after expiration, the ISO form provides Extended Reporting Periods (ERPs) to cover claims made after the policy ends for occurrences after the retro date:
- Basic ERP (mini-tail) — automatic, free; gives a short window (typically 60 days to report and a 5-year sweep for claims arising from occurrences already reported within 60 days).
- Supplemental ERP (maxi-tail) — purchased by endorsement, unlimited reporting time; must be requested in writing, usually within 60 days of expiration.
Worked timing example
A professional liability policy has a retro date of 1/1/2023 and a term of 1/1/2026–12/31/2026. An error occurs 3/15/2024; the client sues on 6/1/2026.
- Occurrence (3/15/2024) is after the retro date — good.
- Claim made (6/1/2026) is during the policy period — good.
- Result: covered.
Change the error date to 6/1/2022 (before the retro date) and the claim is excluded, no matter when it is reported. This retro-date trap is a frequent exam item.
The five claims-made coverage steps (Step Rating)
Claims-made policies typically mature over about five years. In year one the insurer is exposed only to claims for occurrences in that single year, so the premium is low. Each subsequent year adds another year of prior exposure (back to the retro date), so the premium steps up until the policy reaches a mature rate around year five. The exam trap: a renewing claims-made policy is not more expensive because the insurer is greedy — it is pricing a steadily growing window of insurable occurrences between the retro date and today.
Switching carriers without a gap
When an insured moves to a new claims-made carrier, two clean options preserve continuous coverage:
- Nose coverage (prior acts) — the new carrier accepts the old retro date, covering prior occurrences. Cheapest if available.
- Tail coverage (Supplemental ERP) — the old carrier extends the reporting window for past occurrences.
The danger is advancing the retroactive date on renewal, which silently strips coverage for everything before the new retro date. Replacing an occurrence policy with a claims-made policy also creates exposure for old occurrences not yet reported — buy nose or tail to bridge it.
A claims-made CGL has a retroactive date of January 1, 2024 and a policy period of January 1–December 31, 2026. Bodily injury occurs on June 1, 2023, and the claim is first made on March 1, 2026. Is the claim covered?
An insured is switching from a claims-made policy to a new carrier and is worried about claims that surface after the old policy expires for past covered work. Which option best protects against that gap?
Choosing a Trigger and Avoiding the Long-Tail Gap
The trigger choice matters most for long-tail exposures, where injury surfaces years after the negligent act (asbestos, construction defect, medical injury). The table fixes the distinction.
| Feature | Occurrence | Claims-made |
|---|---|---|
| Coverage trigger | Injury happens during the policy period | Claim is made during the policy period |
| Late-emerging claims | Covered by the old policy that was in force | Covered only if within period + retro date |
| Retroactive date | None | Required - bars acts before it |
| Tail / ERP | Not needed | Essential when policy ends |
Worked timing example: an act of negligence occurs in 2023 but the claim is filed in 2026. Under an occurrence policy, the 2023 policy responds. Under a claims-made policy, the 2026 policy responds only if its retroactive date is 2023 or earlier and the claim is reported in 2026.
Exam Trap: When switching from claims-made to occurrence (or insurers), buy an Extended Reporting Period (tail) on the expiring claims-made policy, or set the new policy's retroactive date to match the old one, to avoid a gap for past acts.