CGL policies are written on one of two triggers, with profound consequences for how long-tail claims are handled.
- Occurrence basis, coverage attaches when the occurrence (injury or damage) happens during the policy period, regardless of when the claim is reported. A 2026 policy responds to a 2026 injury reported in 2031. The dominant form for CGL.
- Claims-made basis, coverage attaches when the claim is first made against the insured during the policy period (and reported to the insurer within the period or any applicable extended reporting period). Common for professional liability, D&O, and EPL policies. The insured needs a retroactive date that goes back at least to the start of practice, and may need tail coverage (extended reporting period) at termination to cover claims reported after the policy expires.
Most CGL policies have two limit structures:
- Per-occurrence limit, the most the insurer pays for any one occurrence (one accident, one event).
- General aggregate limit, the most the insurer pays in total during the policy period across all occurrences (often 2× the per-occurrence limit, though wordings vary).
- Products / completed-operations aggregate, a separate aggregate, often equal to the general aggregate, applicable to that exposure category.
Once an aggregate is eroded, coverage for the remainder of the policy period is reduced. Brokers must monitor erosion and recommend mid-term increases on heavy-loss accounts.
Common mistake: assuming claims-made coverage is portable. It is not. Switching from claims-made to occurrence or to a different claims-made insurer requires careful management of retroactive dates and tail coverage to avoid an uninsured gap.
🧠 Memory hook, "Occurrence = when it happened; Claims-made = when it's reported". Two different clocks; pick the right one for the trigger you have.
Recall: If a 2026 policy ends and the insured switches insurers in 2027, when does a 2026 incident reported in 2028 trigger coverage under occurrence vs. claims-made forms? What does "tail coverage" do on a claims-made policy?