Claims-Made vs. Occurrence Trigger
The two primary policy triggers that determine when coverage applies — either when the claim is first made or when the occurrence takes place.
What It Is
Claims-Made and Occurrence are the two primary coverage triggers in liability insurance that determine when a policy responds to a loss. An occurrence policy covers bodily injury or property damage that occurs during the policy period, regardless of when the claim is actually filed. A claims-made policy covers claims that are first made against the insured during the policy period, regardless of when the underlying event occurred (subject to the retroactive date).
Occurrence coverage is standard for most general liability and commercial auto policies. Claims-made coverage is standard for professional liability (E&O), directors and officers (D&O), employment practices liability (EPLI), and cyber liability policies.
The distinction has profound implications for coverage continuity, policy transitions, and long-tail claim exposure.
Why It Matters for Brokers
Brokers must understand this distinction because it affects how they manage policy transitions, renewal strategies, and coverage gap analysis. With occurrence policies, switching carriers is straightforward — each policy covers events during its term. With claims-made policies, the retroactive date must be maintained across carrier changes, and tail coverage may be needed when a policy is not renewed. Mismanaging the claims-made to occurrence distinction is one of the most common sources of coverage gaps and E&O claims against brokers.
Real-World Example
An architect switches professional liability carriers from Carrier A to Carrier B. Because professional liability is claims-made, the broker must ensure Carrier B's policy uses the same retroactive date as Carrier A (January 1, 2018). If Carrier B sets a new retroactive date of January 1, 2025, the architect has no coverage for errors made between 2018 and 2024 that are discovered after the switch. The broker catches this during policy checking and negotiates the correct retroactive date with Carrier B.
Common Mistakes
- 1Allowing the retroactive date to advance when switching claims-made carriers, creating a gap in prior acts coverage.
- 2Not purchasing tail coverage when a claims-made policy is cancelled without replacement, leaving the insured exposed to future claims from past events.
- 3Confusing occurrence-based coverage expectations with claims-made policy mechanics when explaining coverage to clients.
How brokerageaudit.com Handles This
Policy Checker automatically identifies the coverage trigger (claims-made vs. occurrence) for every policy and tracks retroactive dates across policy years. The platform alerts brokers when a carrier change would advance the retroactive date.