Occurrence vs. Claims-Made
The two trigger mechanisms for liability insurance: occurrence policies cover incidents that happen during the policy period regardless of when the claim is filed, while claims-made policies cover claims filed during the policy period regardless of when the incident occurred.
Overview
Occurrence and Claims-Made are the two ways a liability policy determines whether a claim is covered. Understanding the difference is essential for COI compliance because it affects what happens when a vendor's policy expires or changes carriers.
Occurrence Trigger
An occurrence policy covers any incident that happens during the policy period, no matter when the claim is filed — even years later. If a contractor's work causes damage in 2025 and the claim is filed in 2028, the 2025 occurrence policy responds. This is the preferred trigger for CGL policies because it provides indefinite backward coverage for incidents during the policy term.
Claims-Made Trigger
A claims-made policy covers claims filed during the policy period, but only for incidents occurring after the retroactive date. If the policy expires and is not renewed, there is no coverage for future claims — even for incidents that occurred while the policy was active. This is why claims-made policies require tail coverage (an Extended Reporting Period) when cancelled.
COI Verification
Check the policy form on the certificate. For CGL, occurrence is standard and preferred. If a vendor carries claims-made CGL, verify the retroactive date covers the entire period of their work on your project, and require tail coverage provisions in your contract.
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