11.2 Occurrence vs. Claims-Made CGL and Retroactive Dates
Key Takeaways
- Occurrence forms (CG 00 01) trigger when injury occurs; claims-made forms (CG 00 02) trigger when a claim is first made during the period.
- A claims-made policy's retroactive date bars any injury occurring before it; advancing the retro date creates a coverage gap.
- Occurrence coverage gives automatic long-tail protection - the year-of-injury policy always responds, even decades later.
- The Basic ERP (about a 5-year mini-tail plus 60-day reporting tail) is automatic and free; the Supplemental ERP is purchased for an unlimited tail within 60 days of termination.
- Coverage gaps form when switching forms or carriers - match retro dates or buy a tail to protect prior-acts exposure.
Two Coverage Triggers, Two ISO Forms
The CGL is sold in two trigger versions. The occurrence form (CG 00 01) responds when bodily injury or property damage occurs during the policy period, regardless of when the claim is later filed. The claims-made form (CG 00 02) responds when a claim is first made against the insured during the policy period (or its extension), provided the injury occurred on or after the retroactive date. The coverage trigger - the event that activates the policy - is the single most heavily tested concept in this chapter.
Comparing the Triggers
| Feature | Occurrence (CG 00 01) | Claims-Made (CG 00 02) |
|---|---|---|
| Trigger | Injury/damage occurs in period | Claim first made in period |
| Long-tail exposure | Covered by year-of-injury policy | Covered if reported while active |
| Retroactive date | Not used | Critical - bars pre-retro injury |
| Tail (ERP) needed at expiry | No | Yes, to protect late-reported claims |
| Premium early in program | Higher | Lower (matures over ~5 years) |
| Common buyers | Most businesses | Medical, professional, long-tail risks |
Occurrence coverage is the default and the more common form because it provides automatic 'tail' protection: the policy in force when the injury happened always responds, even decades later.
The Retroactive Date
A claims-made policy uses a retroactive date - usually the inception of the first claims-made policy in an unbroken program. The policy will not pay for any injury or damage that occurred before the retroactive date, even if the claim is made during the current period. Advancing (moving forward) the retroactive date creates a coverage gap and on most states' forms requires the insurer to offer notice; the insured should resist any advancement. A blank or 'none' retroactive date means full prior-acts coverage with no backstop date.
Worked Timeline: When Does Each Form Respond?
Facts: Injury-causing exposure happens on June 1, 2024. The injured party does not discover harm and files suit on September 1, 2027.
- Occurrence form: The policy in force on June 1, 2024 responds, because that is when the injury occurred - even though the claim arrives three years later.
- Claims-made form (retro date 1/1/2023): The policy in force on September 1, 2027 responds, because the claim was made then and the injury occurred after the retroactive date.
- Claims-made form (retro date 1/1/2025): No coverage - the June 1, 2024 injury predates the retroactive date, so the claim is barred even though it was reported during the policy.
This is the classic exam scenario; trace both the date of injury and the date the claim is made.
An insured has a claims-made CGL with a retroactive date of January 1, 2025. A bodily injury occurred November 2024 but the claim is first made in March 2026 while the policy is active. Is the claim covered?
Extended Reporting Periods (Tail Coverage)
When a claims-made policy ends, late-reported claims would fall through the cracks. ISO solves this with Extended Reporting Periods (ERPs):
- Basic ERP (automatic, no charge): A short tail - typically a 5-year mini-tail for claims arising from occurrences reported to the insurer, plus a 60-day tail to report claims first made shortly after expiration. It applies automatically with no extra premium.
- Supplemental ERP (purchased): An unlimited tail bought by endorsement (CG 27 01-style) within 60 days of cancellation/nonrenewal. It carries an additional premium capped by ISO at a percentage (often up to 200%) of the expiring annual premium and reinstates a fresh aggregate.
Switching Forms - Where Gaps Hide
Moving from occurrence to claims-made, or changing insurers, is where uncovered gaps form. If a business switches carriers on a claims-made program, the new policy's retroactive date must match the original program's start, or prior-acts coverage is lost. Conversely, switching from claims-made back to occurrence requires a Supplemental ERP on the old policy to catch late claims for old injuries. Examiners test whether you can spot the missing tail or the advanced retro date that produces an uninsured loss.
ISO Offers Both Forms — Knowing Which You Hold
ISO writes the CGL in an occurrence version (CG 00 01) and a claims-made version (CG 00 02). The occurrence form covers BI/PD that occurs during the policy period regardless of when the claim is filed. The claims-made form covers a claim first made during the policy period for an occurrence on or after the retroactive date. The declarations show which form applies; claims-made policies carry a retroactive date that occurrence policies do not.
The Retroactive Date Controls Backward Reach
On a claims-made CGL, no coverage exists for occurrences before the retroactive date, even if the claim is filed during the policy period. Advancing (moving forward) the retro date on renewal shrinks coverage and can create a gap for prior acts; an insured switching carriers should negotiate to keep the original retro date or buy prior-acts (nose) coverage.
Extended Reporting Periods (Tail Coverage)
When a claims-made policy ends, claims made afterward are uncovered unless an Extended Reporting Period (ERP) applies:
- Basic ERP (mini-tail) — automatic, no extra premium; a short window (often 60 days) to report claims, plus a longer window (e.g., 5 years) for occurrences already reported as incidents during the policy.
- Supplemental ERP (full tail) — purchased for an additional premium, providing an unlimited time to report claims for pre-expiration occurrences after the retro date.
The supplemental tail must usually be requested within 60 days of cancellation/nonrenewal — a tested deadline.
Worked Timeline — Where the Gap Hides
An insured holds a claims-made CGL from 2022–2025 with a 2022 retro date, then switches to an occurrence policy in 2026. An occurrence from 2024 generates a claim in 2027.
- The 2026 occurrence policy responds only to occurrences in 2026 or later — the 2024 act is not covered by it.
- The claims-made policy expired in 2025 — the 2027 claim is after its expiration, so it pays only if a tail was bought.
- Result: without a purchased ERP/tail, the 2024 occurrence claimed in 2027 falls into a gap. Buying the supplemental ERP closes it.
A medical practice is nonrenewing its claims-made CGL and switching to a competitor's claims-made policy. To avoid a coverage gap for late-reported claims tied to prior injuries, what should it do?