Insurance Coverage Triggers
/In the world of insurance, the “trigger of coverage” is the term referring to the event that must happen during the policy period for an insurer’s two primary duties to arise – the duty to defend the insured and the duty to indemnify the insured (i.e., pay the judgment, if any).
When it comes to liability policies, coverage triggers come in two fundamental types: occurrence and claims made. Insurance policies forms will be referred to in reference to these types of triggers - occurrence policies and claims-made policies. Though this is, technically, imprecise. A policy can offer multiple coverages, each of which is defined by a specific coverage form. It is the forms that have the triggers, and different coverages can be triggered by different things.
Nevertheless, here’s the difference. An occurrence policy is triggered by an event occurring during the policy period, regardless of whether the claim or occurrence itself is brought to the attention of the insured or made known to the insurer during the policy period. See id. Typically, the event is what is known as an “occurrence,” or some sort of accident. Sometimes it can be the happening of “injury.” Often times, this distinction makes no difference, but sometimes, where some more exotic torts are involved, it can. And then, for some commercial policies, the happening of some other wrongful conduct beyond the kind of negligence that leads to an accident. On the other hand, a claims-made policy covers claims that are both asserted against the insured and reported to the insurance company within the policy period. Because of the reporting requirement, these are sometimes also called “claims made and reported” policies.
The difference in coverage triggers means that for occurrence policies, when the claim is made is irrelevant to the question of whether coverage is triggered, as is – to some degree – when the claim is reported to the insurance carrier. And for claims made, when the accident or wrongful conduct took place is irrelevant to the question of whether coverage is triggered.
To illustrate, suppose that some “occurrence” happened in August of 2024, and a claim was made in July 2025 and reported to the carrier in the same month. Let’s assume that the insured against whom the claim was asserted had liability insurance with policy periods that correspond to the calendar year. If that liability insurance policy was an occurrence policy, the “occurrence” in August 2024 would have triggered coverage under the insured’s 2024 liability policy. If the insured’s liability policy was a claims-made and reported policy, the making of the claim and reporting of it to the carrier in July 2025 would have triggered coverage under the insured’s 2025 liability policy.
For an insurer who has issued an occurrence policy to an insured, the closure of the calendar year does not necessarily close the book on its potential exposure to claims against its insured. For insurers who issue claims-made policies, they can close their books on the policy year when it expires. Also, for insureds facing certain unique risks, an occurrence policy can be triggered years – even decades – after the close of the policy period, making good record-keeping of vital importance.
There is danger, however, in switching from a claims-made policy to an occurrence policy in consecutive years. For example, in an insured was covered in 2024 by a claims made policy and switched to an occurrence policy in 2025, an occurrence that took place in 2024 but did not result in a claim until 2025, as in the example above, would result in coverage under neither the 2024 claims made policy, nor under the 2025 occurrence policy. Normally, insureds will protect themselves by purchasing extended reporting coverge for their last claims made policy.
Knowing how these coverage triggers is very important when it comes to reporting claims, particularly if claims are made near the end of a coverage period. For insureds covered under claims-made policies, notice to the insurer of the claims must be a priority.
