Occurrence vs claims-made

The difference, in one sentence

An occurrence policy is triggered by when the incident happened — if the work was done while the policy was in force, that policy responds, no matter how many years later the claim shows up. A claims-made policy is triggered by when the claim is reported — it only responds if the claim is filed while the policy is active (and the incident happened after a set retroactive date).

Why occurrence protects you and claims-made can't

Say your sub does work this year on an occurrence policy, and three years from now a defect claim lands — the late kind that completed-operations coverage exists for. This year's policy responds — even though it expired long ago — because the occurrence date is what counts. Now run the same story on claims-made: this year's policy only responds if the claim is filed this year. A claim three years out needs a policy still active three years out, with a retroactive date reaching back to now — coverage the sub controls and can drop by switching carriers or not renewing. For construction-defect and completed-operations claims, which arrive late by their nature, occurrence is the form that keeps you covered.

The retroactive date is where these policies actually fail

Everyone who explains claims-made talks about lapses. The more common failure is quieter and it is the retroactive date — the date printed on the policy before which nothing is covered, no matter when the claim arrives. A claims-made policy that is live, paid up and reporting-current still covers nothing for work done before its retro date.

So "my sub still carries a claims-made policy" and "my sub still has coverage for my job" are two different statements, and the retro date is the entire gap between them. When a sub moves carriers — which small trades do routinely, chasing price — the new policy frequently starts with a fresh retroactive date, meaning it covers nothing that happened before the switch. Prior-acts coverage, which reaches back to the old retro date, exists and can be negotiated at placement. It is not the default, it costs money, and nobody involved has any reason to think about your project when they are shopping a renewal.

The practical consequence: a certificate collected today, showing a live claims-made policy, tells you nothing about whether a claim on last year's work would be paid. The only thing that answers that is the retro date, and it is not on the certificate.

Tail coverage, and the window that closes

An extended reporting period — a tail — lets claims be reported after the policy has ended, for work done during it. It comes in two shapes and the difference is the one that bites. A basic extended reporting period is often automatic and short, measured in weeks or a couple of months. A supplemental one has to be elected and paid for, and it can normally only be bought within a short window after the policy ends. Once that window closes it cannot be bought at any price.

Read your own subcontract against that. A clause requiring coverage to be "maintained for three years following final completion" is enforceable against a sub on an occurrence policy — they simply keep buying insurance. Against a sub on claims-made it depends entirely on somebody electing a supplemental tail inside a window that opens and shuts months or years after your job closed, at a moment when nobody is looking at your contract. That is a promise resting on a diary entry a stranger has not made.

Where you will legitimately meet claims-made

Worth separating two situations, because treating them the same makes you look like you are reading from a checklist. Professional liability — for a design-build sub, an engineer, an architect on a design-assist — is almost always written claims-made, and that is simply how that market works. Asking a design professional for occurrence-form professional liability is asking for something that mostly does not exist, and the right move there is to require the retro date and the tail rather than the form.

General liability written claims-made on a trade contractor is the different case. It is unusual in construction, it is often a sign of a hard placement or a difficult loss history, and it is worth understanding before the crew mobilizes rather than after. Neither is automatically disqualifying. The point is knowing which conversation you are in.

If your sub is on claims-made

It isn't automatically a deal-breaker, but it needs conditions — written into what you require before the sub starts, not agreed on the phone. Confirm the retroactive date (the policy covers nothing before it), and require an extended reporting period — tail coverage — that reaches past your project's completed-operations exposure, so a late claim still has a policy to land on. Get it in writing, and ask the agent to confirm it rather than taking the sub's word.

Hi [Agent name],

We're the general contractor on [Project] and I'm confirming coverage for [Sub name]'s general liability policy.

Could you confirm:
1) Is the GL written on an occurrence or a claims-made basis?
2) If claims-made, what is the retroactive date, and is an extended reporting period (tail) available that would cover completed-operations claims after the policy ends?

Thanks,
[Your name], [Your company]