Occurrence Policy
A policy covering events that occur during the policy period regardless of when the claim is subsequently reported, common in CGL and auto policies.
What It Is
An occurrence policy covers losses arising from events (occurrences) that take place during the policy period, regardless of when the claim is subsequently reported. This is the standard coverage trigger for Commercial General Liability, Commercial Auto, and Workers' Compensation policies. As long as the injury or damage occurred during the policy period, the policy responds—even if the claim is filed years later.
The occurrence trigger provides a significant advantage over claims-made: it does not require continuous coverage to protect past activities. Once an occurrence policy period has passed, any events that occurred during that period are permanently covered, even if the insured cancels coverage entirely. There is no need for tail coverage or concern about retroactive dates.
The trade-off is that occurrence policies can have very long 'tails' of unreported claims—especially for latent injuries like asbestos exposure or environmental contamination. This long-tail exposure makes occurrence coverage more expensive for certain risk classes and is one reason professional liability and other long-tail coverages are written on a claims-made basis.
Why It Matters for Brokers
Brokers must understand the difference between occurrence and claims-made triggers to properly advise clients when switching between policy types or when a client believes their old occurrence policy still protects them. When converting from occurrence to claims-made (common when adding professional liability), the retroactive date on the claims-made policy must be set correctly to avoid creating a coverage gap.
Real-World Example
A contractor had a CGL (occurrence) policy from 2018-2020 and then switched carriers in 2021. In 2025, a homeowner sues over defective work performed in 2019. The 2018-2020 occurrence policy responds because the defective work occurred during its policy period, even though the claim was filed 6 years later. The contractor does not need continuous coverage from 2019 to 2025—the occurrence trigger permanently covers the 2019 work. This is fundamentally different from how a claims-made professional liability policy would handle the same situation.
Common Mistakes
- 1Assuming a current occurrence policy is needed to cover past events—occurrence policies cover events that happened during their specific policy period, regardless of current coverage status.
- 2Not retaining old occurrence policy documents, which may be needed to respond to claims arising from events during prior policy periods.
- 3Confusing occurrence and claims-made triggers when advising clients about coverage continuity needs and tail coverage requirements.
How brokerageaudit.com Handles This
brokerageaudit.com's Policy Checker identifies the coverage trigger (occurrence vs. claims-made) on every liability policy and displays it prominently. The system maintains a historical record of all prior policy periods, carriers, and triggers, creating a complete coverage timeline that helps brokers determine which policy responds to claims arising from past events.