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the two TYPES OF GENERAL LIABILITY POLICIES
OCCURRENCE vs CLAIMS MADE
The main difference is the policy trigger: occurrence policies cover events that happen during the policy period, regardless of when the claim is filed, while claims-made policies only cover claims that are both made and reported while the policy is active. Occurrence policies offer lasting protection for events that occurred during their term, even after they've expired, but claims-made policies require you to purchase "tail coverage" to protect against claims filed after the policy ends.
OCCURENCE
Trigger: The date the incident or accident occurred. Coverage: Protects you even if the policy has expired, as long as the event happened during the policy's active period. Tail coverage: Not necessary because coverage is perpetual for events that occurred during the policy term. Example: If a slip-and-fall happens on your property while your occurrence policy is active, it will still cover a lawsuit filed years later, even after the policy has expired.
CLAIMS MADE
Trigger: The date the claim is filed and reported to the insurer. Coverage: Only provides coverage if both the incident and the claim report fall within the same policy period. Tail coverage: Often required to cover claims made after the policy has been canceled. This is an optional purchase that extends coverage for incidents that occurred during the policy period but are reported later.
- Example: If you have a claims-made professional liability policy, a claim must be made against you while the policy is active to be covered. If you retire and a claim is filed after your policy has expired, it will not be covered unless you purchased tail coverage.
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