What is the major difference between the occurrence and claims-made versions of the Commercial General Liability coverage form?

Rationale

Coverage trigger is the major difference between the occurrence and claims-made versions of the Commercial General Liability coverage form.

The coverage trigger determines when a claim must occur for it to be covered under the policy. Occurrence policies cover claims arising from incidents that happen during the policy period, regardless of when the claim is made, while claims-made policies only cover claims made during the policy period, regardless of when the incident occurred.

A (Amount of aggregate limits provided) YOUR ANSWER

Both occurrence and claims-made policies can provide similar aggregate limits for coverage, as this is a feature determined by the specific policy rather than the type of coverage form. Thus, the amount of aggregate limits is not a distinguishing factor between the two forms.

B (Coverage trigger) CORRECT

This is the correct distinction. The occurrence form triggers coverage based on when the event took place, while the claims-made form triggers coverage based on when the claim is reported. This fundamental difference significantly impacts how and when claims are processed and covered.

C (Policy term permitted) YOUR ANSWER

Both occurrence and claims-made policies can have similar policy terms, typically ranging from one year to multiple years, depending on the insurer's offerings. The duration of the policy term does not inherently differentiate the two coverage forms.

D (Exclusions) YOUR ANSWER

Exclusions can vary between individual policies, but they are not fundamentally different between occurrence and claims-made forms. Both policy types may have similar exclusions related to coverage, so this does not serve as a primary distinction.

Conclusion

The principal difference between occurrence and claims-made Commercial General Liability coverage forms lies in their coverage triggers. Occurrence policies cover events based on the timing of the incident, while claims-made policies focus on when the claim is made. Understanding this distinction is crucial for businesses to choose the appropriate coverage that aligns with their risk management strategies.

What is the major difference between the occurrence and claims-made versions of the Commercial General Liability coverage form?

Coverage trigger is the major difference between the occurrence and claims-made versions of the Commercial General Liability coverage form.

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