Occurrence Policy

What is an occurrence policy?

An occurrence policy covers incidents that occur during the policy period, regardless of when the claim is reported. If you have coverage in 2024 and an incident happens that year, you can report the claim in 2030 and still have coverage. This differs from claims-made policies where both the incident and claim must fall within certain parameters. Occurrence coverage provides more complete long-term protection.

Occurrence vs claims-made comparison

Occurrence policies never need tail coverage since protection is permanent for incidents during the policy period. However, they cost more because insurers cannot close out policy years; claims can emerge decades later. Claims-made policies cost less annually but require continuous coverage or tail. For professional liability, claims-made dominates the market. General liability and some other coverages more commonly use occurrence forms.

When occurrence policies apply

General liability policies for premises and operations typically use occurrence coverage. Some professional liability policies are available in occurrence form at higher premiums. If you can obtain occurrence coverage for your professional work, it eliminates tail concerns. Compare the lifetime cost of occurrence coverage against claims-made plus tail. Your insurance broker can model the economics for your situation.