Claims-made vs. occurrence policy: what is the difference?
Short answer
An occurrence policy responds to an event that happened during the policy period, no matter when the claim is reported. A claims-made policy responds to a claim reported during the policy period, subject to a retroactive date. General liability is occurrence; professional liability, tech E&O, cyber, and EPLI are claims-made.
| Attribute | Claims-made | Occurrence |
|---|---|---|
| Coverage trigger | When the claim is reported | When the event happened |
| Retroactive date | Applies, and must be carried forward when switching carriers | Not applicable |
| Tail coverage | Often needed when the policy ends | Not needed |
| Late reporting | Can defeat coverage | Generally not an issue |
| Used for | Professional liability, tech E&O, cyber, EPLI, D&O | General liability, property, commercial auto, personal lines |
| Premium pattern | Prices current exposure, often lower at inception | Prices the policy year, with the tail built in |
Which one do you need?
You rarely get to choose: the coverage type decides the structure. What you can control is the retroactive date and whether you buy tail coverage. Confirm both at every renewal and every carrier change.
Common questions
- Is occurrence coverage better?
- It is broader for long-tail injury claims because no reporting deadline applies, but it is not available for most professional liability exposures. Neither structure is inherently better.
- What happens if I switch carriers on a claims-made policy?
- Ask the new carrier for prior acts coverage that reaches back to your old retroactive date. If they will not reach back, you need tail coverage on the expiring policy.
- Do I need tail coverage on an occurrence policy?
- No. Tail exists to extend a reporting period, and occurrence policies are triggered by the event date rather than the report date.