What's the difference between occurrence and claims-made insurance?
The difference comes down to one question: what has to happen during the policy period for the policy to respond? An occurrence policy covers incidents that happen while the policy is active — even if the claim shows up years later. A claims-made policy covers claims that are filed while the policy is active, usually with a condition about when the incident itself took place.
That one-word difference — "happen" versus "filed" — changes how you buy coverage, how you switch carriers, and what a checkbox on a certificate of insurance is trying to tell you. Let's walk through it without the jargon fog.
The two triggers, in plain English
Insurance people call this the "coverage trigger" — the event that switches the policy on for a particular loss.
An occurrence policy is triggered by when the incident happens. Say you carried an occurrence-form general liability policy in 2024, and a pipe you installed that year fails in 2027. The claim lands in 2027, but the incident occurred in 2024 — so it's the 2024 policy that responds, even though it expired long ago. You don't need to still be with that carrier. You don't even need to still be in business.
A claims-made policy is triggered by when the claim is made. The claim has to be filed against you (and typically reported to the carrier) while the policy is in force. If the policy has ended and you didn't buy tail coverage — more on that below — a claim that arrives afterward generally isn't covered, even if the work happened while you were insured.
The retroactive date: claims-made's fine print
Claims-made policies usually come with a retroactive date — often shortened to "retro date." It's the earliest incident date the policy will cover. A claim filed during the policy period is only covered if the incident that caused it happened on or after the retro date.
So a claims-made policy really has two conditions: the claim must be filed while the policy is active, and the underlying incident must have happened on or after the retro date. If your retro date is January 1, 2023, a claim filed today about work you did in 2021 falls outside the policy — no matter how continuously you've been insured since.
This is why the retro date matters so much when you renew or switch carriers. Keep the same retro date, and your history stays covered. Let a new policy reset the retro date to today, and everything before today quietly drops out of coverage.
Tail coverage: why it exists
Tail coverage — the formal name is an extended reporting period, or ERP — solves claims-made's biggest weakness: what happens when the policy ends.
Because a claims-made policy only responds to claims filed while it's active, ending the policy would normally mean claims about your past work have nowhere to go. An extended reporting period keeps the door open: for some added time after the policy ends, you can still report claims about incidents that happened before it ended. It doesn't cover new work — it just extends the window for reporting claims about old work.
Contractors commonly run into this when retiring, closing a business, or moving from a claims-made policy to an occurrence one. Whether you need a tail, and how long it should run, is a conversation for your insurance agent — it depends on your policy and your situation.
Which form will you actually see?
For trades businesses, general liability is commonly written on an occurrence form. That fits construction work: defects and injuries from a job can surface years after the crew leaves, and an occurrence policy reaches back to the year the work was done.
Professional liability — often called errors and omissions, or E&O — is commonly written claims-made. Design errors, bad specs, and missed deadlines tend to be discovered and disputed over a longer arc, and carriers typically prefer the claims-made structure for that kind of risk.
"Commonly" is doing real work in both sentences. Either coverage can be written either way, so never assume — read the policy, or ask your agent which form you actually have.
Where this shows up on a COI
On an ACORD 25 — the standard certificate of insurance form — look at the commercial general liability section. Right near the top you'll find two small checkboxes: CLAIMS-MADE and OCCUR. Whichever is ticked tells you the form of the GL policy behind the certificate.
If you collect COIs from subcontractors, that checkbox is worth a glance. Many GCs and their contracts usually expect occurrence-form general liability, so a ticked CLAIMS-MADE box on a sub's certificate is a good prompt to ask a question — not a violation on its face, since requirements vary by contract. When in doubt, check what your contract actually says or ask the sub's agent what's behind the certificate.
If chasing those certificates is the hard part, CompliCloud collects your subs' COIs in one place, so you can actually look at the checkboxes instead of digging through email.
Switching carriers on a claims-made policy: what to ask
Switching an occurrence policy is fairly clean — each policy owns the incidents that happened on its watch. Switching a claims-made policy is where people get burned, because a gap in the timeline can strand years of past work with no coverage.
These aren't decisions to make from a blog post, so frame them as questions for your agent before you sign anything new:
None of these questions cost anything to ask, and each one closes a gap that's expensive to discover later.
- Will the new policy carry over my existing retroactive date, or reset it?
- If the retro date resets, what happens to claims about work I did before the switch?
- Do I need tail coverage (an extended reporting period) on the old policy — and for how long?
- Is there any gap between the old policy ending and the new one starting?
- Am I moving between claims-made and occurrence forms, and what does that transition leave uncovered?
Common questions
Can a general liability policy be claims-made?
Yes. General liability for trades is commonly written on an occurrence form, but claims-made GL policies exist. That's exactly why the ACORD 25 has both a CLAIMS-MADE and an OCCUR checkbox in the GL section — so the certificate can tell you which one you're looking at.
What is a retroactive date in plain terms?
It's the earliest incident date a claims-made policy will cover. A claim filed during the policy period only counts if the incident behind it happened on or after that date. Incidents from before the retro date are outside the policy, no matter when the claim is filed.
What happens if I let a claims-made policy lapse?
Once a claims-made policy ends, claims filed afterward generally aren't covered — even for work done while the policy was active — unless you bought tail coverage. That extended reporting period keeps a window open to report claims about incidents that happened before the policy ended. Ask your agent before letting any claims-made policy end without a plan.
Is occurrence coverage better than claims-made?
Neither is better across the board — they're different structures for different risks. Occurrence is simpler to leave behind, since each policy permanently owns its policy period. Claims-made needs more care around retro dates and tails, but it's the common structure for professional liability. What you need varies by trade and contract, so talk it through with your agent.
Does the OCCUR box on a COI mean the certificate is fine?
It means the general liability policy shown is occurrence-form, which is what many GCs and contracts often expect. It doesn't say anything about limits, endorsements, or whether the policy is still in force. Read the rest of the certificate too, and verify with the issuing agent if something looks off.
This guide is general information for US trades businesses, not legal or insurance advice. Requirements vary by state, locality and contract — confirm the specifics with your licensing body, your client’s contract, or your insurance agent.