Occurrence Policy
An occurrence policy covers bodily injury, property damage or other covered loss that takes place during the policy period, regardless of when the claim is later made, so coverage generally does not depend on reporting the claim before the policy expires.
Last updated October 13, 2026
How an occurrence policy works
The trigger for an occurrence policy is when the covered injury or damage happens, not when someone makes a claim. If bodily injury or property damage takes place while the policy is in force, that policy may respond even if the claim is filed years later, subject to its terms, limits and exclusions. A company can have changed insurers or even stopped operating by then, and the older policy may still be the one that applies. Commercial general liability is the best-known occurrence form, though some insurers also offer claims-made versions.
What counts as an occurrence
The policy defines the word. A common definition is an accident, including continuous or repeated exposure to substantially the same general harmful conditions. That wording matters in two ways. First, it determines which policy period is triggered, which can be complicated for harm that develops gradually. Second, it affects how many occurrences there are, and so how many per-occurrence limits and retentions apply to a single set of facts. How those questions are answered can depend on the exact wording and on the law of the relevant state, so it is a topic for your broker and counsel when a real claim arises.
How an occurrence policy works
The trigger is when the injury or damage happens, not when someone makes a claim. If the covered injury or damage occurs while the policy is in force, that policy responds even if the claim is filed years after it ends, subject to its limits and terms. IRMI notes that this type of coverage effectively includes its own tail, so there is usually no need to buy separate extended reporting coverage.
Most commercial general liability insurance is written on an occurrence form. Because the policy that applies is the one in force when the injury or damage occurred, an insured that keeps old policies on file can identify which policy year is implicated by a later claim. The alternative structure is a claims-made policy, which is triggered by the claim instead.
Example
A hypothetical hardware company sells a device in 2024 that causes property damage at a customer's site in 2025, while its occurrence-based general liability policy is in force. The customer sues in 2027. Even if the company has since changed insurers, the 2025 policy may be the one that responds, subject to its terms.
What to watch for
- Timing of the injury: the policy year is fixed by when the injury or damage happened, which can be hard to pin down for gradual or continuing harm.
- Limits per year: each policy period has its own limits, so older policies may carry lower limits than you would buy today.
- Notice still matters: you should still notify the insurer promptly, even though coverage does not depend on the claim being made during the policy period.
- Not universal: not every coverage is offered on an occurrence basis. Many professional and management liability lines are claims-made only.
- Cost: occurrence coverage is often priced higher than an equivalent claims-made form because of the longer window for claims, though this varies.
Occurrence vs. claims-made
- Trigger. Occurrence responds to injury or damage during the policy period. Claims-made responds to claims first made, and generally reported, during the policy period.
- Timing of the claim. An occurrence policy can respond to a claim made after expiration if the injury happened during the period. A claims-made policy generally needs to be in force, or have an extended reporting period, when the claim is made.
- Retroactive date. Claims-made policies usually have a retroactive date that limits coverage for earlier acts. Occurrence policies do not use one, because the injury date controls.
- Tail coverage. Claims-made policies often need an extended reporting period or tail coverage when the policy ends. Occurrence policies generally do not, which is why they are sometimes easier to wind down.
- Typical lines. Occurrence is common for general liability and auto. Claims-made is common for professional, management liability and cyber.
Neither is better in the abstract. Each fits different exposures, and many companies carry both.
A second example: a claim long after the policy ended
A hypothetical company has an occurrence-based general liability policy with one insurer in its first year, then switches insurers. Two years later, a visitor says they were hurt at the company's former office during that first year and brings a claim. The first-year policy is the one potentially triggered, since the injury happened during its policy period, even though the company no longer buys from that insurer. The company needs to locate the policy, give notice, and understand the limits that applied at that time. If it had not kept copies of old policies, it might waste time reconstructing them.
Common mistakes
- Not keeping old policies, certificates and broker correspondence. Long-tail claims can reach back to years you no longer think about.
- Assuming an old occurrence policy does not matter after the company changes carriers or is sold.
- Waiting to give notice because "the claim is not this year's problem." Notice conditions still apply.
- Forgetting that each policy year has its own limits and that older limits may be lower than today's.
- Assuming every line of coverage is occurrence-based. Many technology-related lines are not.
- Not asking how the aggregate and retentions work across several years for a continuing issue.
Questions to ask your broker
- Which of our policies are occurrence and which are claims-made?
- How are our older occurrence policies documented and stored?
- How would a continuing injury or product issue be allocated across policy years?
- If we are acquired or wind down, what happens to coverage for past occurrences and to the claims-made lines?
- Do our contracts require a specific trigger or tail period for any policy?
Why it matters for technology, AI, fintech and digital-asset companies
Companies that ship hardware, robotics or devices often rely on occurrence-based general and product liability, which can respond to bodily injury or property damage claims that surface long after a sale. Their software, cyber and D&O coverage, by contrast, is mostly claims-made. Knowing which policies use which trigger helps a company plan for change-of-control events and wind-downs. See our product liability and general liability pages.
The mix of triggers across a technology company's program deserves its own review. Hardware, robotics and drone businesses may rely on occurrence-based general and product liability coverage that can respond long after a device is sold, while their cyber, technology E&O and D&O coverage is usually claims-made and can need prior acts coverage and a run-off plan in a sale or shutdown. Staying clear on which line uses which trigger prevents surprises in a transaction. An umbrella policy may add limit over an occurrence-based primary. See physical AI and hardware and cyber and technology E&O.
Related terms
Frequently asked questions
What is an occurrence policy?
An occurrence policy covers bodily injury, property damage or other covered loss that takes place during the policy period, regardless of when the claim is later made, so coverage generally does not depend on reporting the claim before the policy expires.
What is the difference between occurrence and claims-made?
An occurrence policy covers injury or damage that happens during the policy period, whenever the claim is made. A claims-made policy covers claims first made and reported during the policy period, subject to the retroactive date. The trigger is the incident in one and the claim in the other.
Do occurrence policies need tail coverage?
Generally no. Because coverage follows the date of the injury or damage, later claims from that period fall under the older policy without a separate extended reporting period. Tail coverage is a feature of claims-made policies, which stop responding to new claims once they end.
Which insurance is usually written on an occurrence basis?
Commercial general liability is most commonly written on an occurrence form. Professional liability, errors and omissions, D&O and employment practices coverage are usually claims-made. Some insurers offer general liability only on an occurrence basis, but availability varies.
Does an occurrence policy cover claims made after the policy expires?
It can. If the covered injury or damage happened while the policy was in force, the policy may respond even if the claim is made later, subject to its terms, limits, exclusions and notice conditions. That is the main difference from claims-made coverage, which generally needs to be in force or have an extended reporting period when the claim is made.
What is an occurrence under an occurrence policy?
The policy defines it. A common definition is an accident, including continuous or repeated exposure to substantially the same general harmful conditions. How many occurrences exist for a set of facts can affect which limits and retentions apply, and the answer depends on the wording and on the law that applies.
Do I need to keep old occurrence policies?
Yes, it is wise to keep them, along with certificates and related correspondence. An injury or damage claim can reach back to a past policy year, and you will need the policy wording, limits and insurer details to give notice and respond. Keep copies even after you change carriers or the business changes hands.
Is occurrence coverage better than claims-made?
Neither is better in all cases. Occurrence gives longer-lasting protection for injury and damage during the period and usually avoids tail issues, but is often priced higher and is not offered for every line. Claims-made fits exposures with long reporting delays, but needs careful attention to continuity and retroactive dates.
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