The Differences Between Claims-Made and Occurrence Policies

Posted on: September 12, 2019 by Huntersure LLC.

Liability policies for clients are usually broken down into two categories: occurrence or claims-made. This system helps to streamline the process of handling claims, expediting everything from payouts to updating a current policy’s limits.

An occurrence policy provides coverage for claims that result from an injury or another event that occurs during the term of a policy. For a claims-made policy, claims that are made during the policy period are covered, and coverage depends on the timing of the claim itself. This is true in any industry, including insurance for a legal professional with attorney professional liability insurance.

So, since the two coverages are essentially the same and cover some of the same ground, what’s the difference, and what kind of policy should someone in the legal sphere pursue to stay protected against claims?

Occurrence CGL

Most liability policies are formulated on the occurrence version of the commercial general liability coverage form as it covers damages that the insured or any other insured becomes legally obligated to pay due to bodily injury or property damage. The alleged bodily injury or damage must be caused by an occurrence that happens in the coverage territory, during the policy period, and be unknown to the insured prior to the policy’s start.

Claims may be made during the policy’s period or anytime after that. One perk that an occurrence policy has is that it covers claims filed many years following the expiration of a policy period.


What most people get confused by is the fact that a claims-made policy is mostly similar to an occurrence policy. Everything from exclusions to limits and definitions to who is insured is very similar. Just like the occurrence policy, a claims-made policy covers damages that the insured becomes obligated to pay legally because of bodily injury or property damage.

But there are two provisions in the claims-made policy that creates a major divergence. For one, a claim for damages must first be made against any insured during the policy period. Second, the bodily injury or property damage must happen on or after the retroactive date if one is shown in the declarations portions of the form, but not any time after the policy period expires.

A claims-made policy may include a retroactive date. When this is the case, no coverage is provided for claims resulting from events that happened before the date written in the form. The retroactive date is the earliest date on which injury or damage may happen and still be covered under the policy’s outline.

Reporting Requirements

All claims-made policies spell out that claims must be made during the policy period Many policies do not explicitly outline a certain time period for reporting claims. Instead, they justs tate that claims must be made as soon as possible. Some policies can be more restrictive as they require claims to be made and reported to the insurer during the policy period.

There is the option for an extended reporting period. Coverage gaps can be protected against if a client purchases an extended reporting period in their policy. This extends the time period during which claims may be made and reported to the insurer of their coverage. It doesn’t extend a policy and claims are covered if they result from an injury that happened before a policy expires.

About Huntersure

At Huntersure, we specialize in providing quality professional liability solutions to accounting professionals. Our Accountant Liability Insurance program provides coverage for accountants, auditors, bookkeepers, and tax preparers, so no matter where your clients lie in the industry they can have the coverage they need to protect themselves and their assets. To learn more about our operation and our Professional Liability Insurance solutions, contact us today at (855) 585-6255.

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