Occurrence versus claims-made

Definition

Whether a policy pays for when it happened or for when you claim.

Why It Matters

The other form, occurrence, covers whatever happened during the term whenever the claim turns up, and the difference decides who carries the years before closing. A claims-made policy that ends at closing leaves everything the business did before it uninsured the moment the policy lapses, and the thing that surfaces after a sale is usually the thing nobody knew about. Professional liability, employment practices and directors and officers cover are commonly written this way, and general liability commonly is not, so the answer is per policy and the seller's broker can state it in a sentence. Ask which form each policy is before pricing anything, because the tail exists only for this one and its cost belongs in the deal and not in the first year of operating.

In numbers: A claim reported a month after a policy ends is 100% uninsured under this form, however long the business had been paying for it.