Claims-Made vs. Occurrence

Claims-made and occurrence describe the two main ways a liability policy decides whether a claim is covered based on timing. An occurrence policy looks at when the harm happened; a claims-made policy looks at when the claim is first made against you. That distinction shapes how long your coverage protects you and what happens when you change or cancel a policy. This page compares the two in plain terms.

At a glance

Claims-Made vs. Occurrence — At a glance
	Claims-Made Claims-Made	Occurrence Occurrence
What it covers	Claims first made against you while the policy is active (and after any retroactive date)	Injury or damage that happens during the policy period, whenever the claim is later filed
When it applies / triggers	The date the claim is made or reported, not when the harm occurred	The date the harm occurred, regardless of when the claim arrives
Typical cost	Often lower in early years, rising as coverage matures	Generally higher upfront because it covers long-tail claims
Key limits or exclusions	Requires an active policy or tail coverage when the claim arrives; retroactive date limits how far back it reaches	Aggregate limit is set by the year the harm occurred; older limits may be lower
Best suited for	Professional liability, D&O, and other lines where claims surface long after the work	General liability and lines where harm and claim are close in time

How Claims-Made and Occurrence Differ

The trigger is everything. An occurrence policy covers harm that takes place during the policy period, even if the injured party does not file a claim until years later, after the policy has lapsed. A claims-made policy instead responds only if the claim is first made while the policy is in force, and typically only if the underlying event happened after the policy's retroactive date. In short, occurrence follows the event; claims-made follows the claim.

This difference creates continuity issues that occurrence policies avoid. If you cancel or replace a claims-made policy, a claim that arrives afterward may go uncovered unless you buy tail coverage (an extended reporting period) or the new policy honors your old retroactive date. Occurrence coverage carries no such worry: once a policy year covers an event, that protection stays locked to that year's limits. The tradeoff is cost and availability, which is why professional liability and management liability lines in California are frequently written claims-made while general liability is usually occurrence.

Retroactive Dates and Tail Coverage

When switching claims-made carriers, preserving the original retroactive date keeps past work covered; losing it can strand years of prior exposure. Tail coverage serves the same protective purpose when a policy ends entirely.

Where to find it in your policy

Declarations page

Confirm whether the policy states claims-made or occurrence, and note the retroactive date if one is shown.

Policy form insuring agreement

Read how the form defines the coverage trigger and reporting requirements; claims-made forms specify how and when a claim must be reported to be covered.

Extended reporting period endorsement

Check for tail coverage terms, including how long you have to buy it after cancellation and the length of the reporting window it provides.

What it looks like on a real claim

Example 1 — Claim surfaces two years after the work

A consultant finishes a project in 2024, lets the policy lapse in 2025 with no tail, and is sued in 2026 over that 2024 work.

Claims-Made

Does not cover the 2026 suit because no active policy or tail existed when the claim was made

Occurrence

Would cover the 2024 work under the 2024 policy year, since the harm occurred while it was in force

Example 2 — Continuous coverage with a preserved retro date

A business keeps a claims-made policy in force year after year, always carrying forward the original 2021 retroactive date, and a claim from 2022 work arrives in 2026.

Claims-Made

Covers the claim because the policy is active and the 2022 event is after the retroactive date

Occurrence

Covers the claim under the 2022 policy year regardless of when it was reported

The bottom line

Whether a liability policy is claims-made or occurrence changes how long your protection reaches. Occurrence coverage ties protection to the year an event happened and keeps it there; claims-made coverage requires an active policy, or tail coverage, at the moment a claim is actually made.

The retroactive date and extended reporting period are the levers that keep claims-made coverage continuous across policy changes. Checking those terms on the Declarations page and in the policy form is how you confirm that past work stays protected.

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