In insurance terms, how does an occurrence policy differ from a claims-made policy?

An occurrence policy is structured to provide coverage for incidents that take place during the policy period, regardless of when the claim is actually made. This means that if an event occurs while the policy is active, the insurer will respond to claims arising from that event even if the claim is filed long after the policy term has ended. This feature distinguishes occurrence policies by ensuring that the coverage remains intact as long as the events occurred during the defined time frame of the policy, offering ongoing protection to the insured against claims that may arise later.

In contrast, claims-made policies specifically require that claims be made during the active policy period in order to be covered, and they are often subject to a retroactive date, meaning that only incidents occurring after this date are covered. This results in a different risk management approach for policyholders, who need to maintain continuous coverage to ensure they are protected against claims for incidents that might not be reported until the future.