Two policies can have the same limit and price and still respond very differently to the same claim. The reason is often the policy trigger: whether it's written on a claims-made or an occurrence basis.
Occurrence policies
An occurrence policy covers incidents that happen during the policy period, no matter when the claim is filed. If an injury happens in 2026 and the lawsuit arrives in 2029, the 2026 policy responds. Most general liability policies are written this way.
Claims-made policies
A claims-made policy covers claims first made while the policy is active, for work performed after the policy's retroactive date. Most professional liability, legal malpractice, D&O, EPL and cyber policies use this trigger, and many medical malpractice policies do too.
The retroactive date
The retroactive date is the earliest date of work the policy will cover. Keeping the same retroactive date when you renew or change carriers protects your prior work. Losing it can quietly leave years of past work uninsured.
Tail coverage (extended reporting period)
When a claims-made policy ends, because you retire, close the business, sell it or switch to a carrier that won't honor your retroactive date, claims made later about past work may not be covered. Tail coverage, also called an extended reporting period, lets you report those claims after the policy ends.
Nose coverage (prior acts)
Sometimes a new carrier agrees to cover prior acts back to your original retroactive date. This is often called nose coverage, and it can replace the need to buy tail from the old carrier.
When this matters most
- Changing insurance carriers
- Retiring, closing or selling a business
- A professional leaving a firm or practice
- Merging firms or adding new partners
- Receiving a non-renewal notice
In each of these moments, a few decisions about retroactive dates, tail and nose coverage determine whether past work stays protected. They're worth making deliberately, with someone who has handled the claims on the other side.
Frequently asked questions
Is claims-made coverage worse than occurrence?
Not necessarily. Claims-made policies are standard for professional and management liability, and they can be priced more efficiently. They just require attention to continuity, retroactive dates and tail coverage.
How long does tail coverage last?
Tail options vary by policy and carrier. Some offer one to several years, and some offer an unlimited reporting period. We'll show you the options before you need them.
This article is general information, not legal or insurance advice. Coverage depends on the terms, conditions and exclusions of the policy issued, and availability varies by state and carrier.