What Is Claims-Made vs Occurrence?

The trigger is the difference. Under an occurrence form, the policy in force when the injury or damage happens responds, even if the claim arrives years later after that policy has expired. Under a claims-made form, the policy in force when the claim is first made and reported responds, but only if the incident occurred on or after the retroactive date written on the policy. Claims-made-and-reported forms add a stricter condition: both the claim and the report must fall inside the period.

Producers meet this distinction most in professional liability, such as errors and omissions and directors and officers, where claims-made is standard, and in general liability, where occurrence is the norm. When a client switches carriers, the retro date must carry over or prior acts are left uncovered. When a claims-made policy ends, the client may need an extended reporting period, called a tail, to cover claims that surface later, or the new insurer must offer prior-acts coverage, sometimes called a nose.

A claims-made quote that costs less is a different product with a different trigger, so comparing it with an occurrence quote as if they were equals misleads the buyer. The mistakes that hurt most are letting a claims-made policy lapse with no tail, resetting the retro date at renewal, and assuming that a claim made after expiration is covered because the incident happened during the term. Always confirm the form type, the retro date, and the reporting rules.