An occurrence policy covers incidents that happen during the policy period, no matter when the claim is filed. A claims-made policy covers claims filed while the policy is in force, for incidents after its retroactive date. General liability is usually occurrence; professional, pollution, and management liability are usually claims-made.
The two policy forms answer different questions. An occurrence policy asks when the incident happened. A claims-made policy asks when the claim was made. The IRMI definitions of occurrence and claims-made policies put it in those terms, and every insurer's explainer, such as The Hartford's comparison, repeats the same distinction.
Side by side
| Occurrence | Claims-made | |
|---|---|---|
| Trigger | Incident during the policy period | Claim filed during the policy period |
| Late claims | Covered by the policy in force at the time | Covered only if a policy or tail is in force when filed |
| Retroactive date | None | Limits how far back incidents are covered |
| Typical lines | General liability, auto, workers compensation | Professional, pollution, directors and officers, cyber |
| Cost pattern | Stable | Cheaper early, rises as exposure builds |
Why property managers should care
Most vendor and tenant general liability policies are occurrence forms, which is what a building wants: a claim from an incident during the work is covered regardless of when it surfaces. The exception is professional and specialty coverage. An engineer's professional liability, a remediation contractor's pollution policy, or a consultant's errors and omissions is almost always claims-made. For those, the reviewer needs two extra facts: the retroactive date, which should predate the start of the vendor's work for the building, and whether a tail (an extended reporting period) will be bought if the policy ends.
What to put in the requirement
Vendor contracts can state that general liability must be written on an occurrence form, and that any claims-made coverage must carry a retroactive date no later than the contract start and be maintained, or tailed, for a stated number of years after completion. Three years is a common figure in construction contracts; the right number depends on the work and the statute of limitations where the building sits.
Related terms
Frequently asked questions
Which is better for a landlord, claims-made or occurrence?
For general liability, occurrence. A slip-and-fall reported two years later is still covered by the policy in force when it happened. Claims-made coverage is accepted where the market only offers it, such as professional liability for engineers and consultants, provided the retroactive date and any tail are checked.
What is a retroactive date?
The earliest date from which a claims-made policy covers incidents. An act before the retroactive date is not covered even if the claim arrives while the policy is active. When a vendor changes insurers, a reviewer confirms the new policy keeps the original retroactive date rather than resetting it.
What is tail coverage?
An extended reporting period bought when a claims-made policy ends, so claims filed after expiry for incidents during the policy period are still covered. Without a tail, a vendor who cancels a claims-made policy after finishing a project leaves the building exposed to late claims.
How does the ACORD 25 show claims-made or occurrence?
Each liability row on the ACORD 25 has checkboxes for claims-made or occurrence. For claims-made lines the retroactive date should appear in the description of operations box. A reviewer records both, because a certificate that shows claims-made general liability deserves a question.