Occurrence-Based Insurance Policy
An occurrence-based policy covers claims arising from an incident that happened during the active policy period, regardless of how much later the claim is actually filed, which is different from a claims-made policy that only covers claims reported while the policy is in force. The Allen Thomas Group generally steers clients toward occurrence-form general liability coverage when it's available, since it removes the ongoing need to buy tail coverage after a policy ends.
Occurrence vs. Claims-Made Policies
| Occurrence | Claims-Made | |
|---|---|---|
| What triggers coverage | When the injury or damage happened | When the claim is reported to the insurer |
| Coverage after the policy ends | Still applies for incidents during the policy term | Generally none, unless tail coverage is purchased |
| Common for | General liability | Professional liability, D&O, EPLI |
Why Occurrence Coverage Doesn't Need Tail Coverage
Because an occurrence policy is triggered by when the incident happened, not when it's reported, you don't lose protection just because the policy expired or you switched carriers before a claim surfaced. A customer who slips and falls in year one but doesn't file a lawsuit until year three is still covered by the policy that was active at the time of the fall, as long as that policy hasn't been cancelled for nonpayment or other reasons unrelated to the claim itself.
Which Businesses Typically Carry Occurrence Coverage
Most standard general liability and commercial property policies are written on an occurrence basis, which is one reason those lines rarely require tail coverage when a business switches carriers. Professional services businesses (consultants, accountants, agencies) more often see claims-made forms instead, because the risk they're insuring, like a bad piece of advice, can take years to surface as an actual claim, and insurers prefer to price and control that lag through renewal terms rather than carry it indefinitely on one policy year.
How The Allen Thomas Group Can Help You
We'll help you understand exactly how occurrence-based insurance policy affects your coverage and cost, then shop your policy across 15+ A-rated carriers to find the right fit.
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