What is the difference between occurrence and claims-made coverage?
An occurrence policy answers for anything that happened while it was in force, no matter how many years later the claim arrives. A claims-made policy answers only for claims first made against you while it is in force, so it stops protecting you the day it ends unless you buy tail coverage.
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The detail
An occurrence policy responds to injury or damage that took place during the policy period, regardless of when the claim is reported.
A claims-made policy responds only to claims first made during the policy period, and commonly only for acts after a stated retroactive date.
Extended reporting period coverage, commonly called tail coverage, allows claims to be reported after a claims-made policy ends for acts committed while it was in force.
General liability is usually written on an occurrence form, while professional liability and cyber are usually written claims-made.
What this means for you
- Cancelling a claims-made policy can leave you with nothing. The moment it lapses, a claim about work you did while insured has no policy to go to. That is what tail coverage buys back, and it is bought at the end rather than at the start.
- The retroactive date is the number to protect when you switch. Moving to a new claims-made policy with a fresh retroactive date quietly drops every year of past work. Ask the new insurer to match the old date, which is normal and usually free.
- Two policies of the same size are not the same purchase. A claims-made policy is cheaper in year one and steps up for several years as its exposure grows. Comparing a first-year claims-made price against an occurrence price is comparing a deposit against a full cost.
- Retiring or selling makes this urgent rather than theoretical. A business that closes still gets sued for what it did, and there is no renewal to rely on. Tail coverage is the only thing standing between the owner and a claim that arrives after the doors shut.
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Related questions
- How much does tail coverage cost?
It is usually quoted as a multiple of your last annual premium, and one to two years of premium is a common range for a period of several years. The price is set by the insurer you are leaving rather than by the market, which is the practical reason to decide about tail before you move rather than after.
- Is prior acts coverage the same as tail coverage?
They solve the same problem from opposite ends. Prior acts sits on the new policy and reaches backwards to cover work done before it started, while tail sits on the old policy and reaches forwards to accept claims after it ended. Buying prior acts from the new insurer is frequently cheaper than buying tail from the old one, so ask for both prices.
- Which one should I want?
Occurrence, where the market offers it, because it settles the question permanently and needs nothing from you at the end. Most professional and cyber lines are simply not sold that way, so for those the real decision is not which form to buy but whether you have protected the retroactive date and planned for the tail.
Need this handled?
Reading about it and having it handled are different jobs, and the second one is ours. We place the accounts other brokers decline — claims history, a cancellation, an unusual operation, a business nobody wants to underwrite twice — and we will tell you when the policy you already have is the right one. Tell us the situation and a licensed human replies the same business day.
Written by the licensed brokers at Boring Insurance. Last updated 2026-09-09. See all guides.