Occurrence vs claims-made: what’s the difference?

The difference with an example

A plumber finishes a job in March. A pipe fails in the wall in November, the next year. The claim comes in January after that.

• Occurrence policy: the policy in force when the damage happened responds, even though the claim was filed later.
• Claims-made policy: the policy has to be in force when the claim is made, and often the work has to be after a set “retro date”. If the plumber dropped the policy, the claim may fall through.

Where you’ll see it

The ACORD 25 has a box next to general liability: “Occurrence” or “Claims-made”. Look at which one is checked.

What to do

• For most trades, occurrence is the norm and what most contracts ask for.
• If a sub shows claims-made, ask why, and ask your broker if it works with your contract.
• Ask whether there’s “tail” coverage if the sub ever stops buying the policy.

Not legal or insurance advice. This is general information. Your contract, your state and your policy decide what applies to you. Ask your broker or attorney.

A simple timeline

A sub finishes your building in 2025. A leak shows up in 2027.

• Occurrence policy: responds if the damage happened during a policy period, even if the claim comes later. Policy period matters.
• Claims-made policy: responds only if the policy is active when the claim is made, and the event happened after the policy’s retroactive date.

If the sub cancels a claims-made policy before the 2027 claim, there may be nothing to respond unless they bought extended reporting coverage, often called tail coverage.

What contractors usually do

General liability is most often written on an occurrence basis. Some professional and pollution policies are claims-made. If a sub offers a claims-made policy for a risk you care about, ask your broker what to require, such as the retroactive date and how long tail coverage must continue after the job.