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What is an occurrence-based insurance policy?

An occurrence-based insurance policy is coverage that protects you against losses occurring during a policy period, regardless of when the claim is actually filed. In the insurance world, “occurrence” has a definition of an accident that could include repeated exposure to harmful conditions. Even if the policy is no longer active, you have that protection against certain events. This mostly includes long-tail events, such as chemical spills and other similar incidents because it could be many years before the individual discovers injuries or other damages were the result of the event. In some cases, the insured would have a “cap” on coverage, meaning as soon as the coverage limit is reached, the insured would be responsible for the remaining expenses.Learn more about an occurrence based insurance policy


Learn more about an occurrence based insurance policy

When do I need to be aware of an occurrence-based insurance policy?

Someone who works in a hazardous industry should become aware of occurrence-based insurance policies. For example, someone who works in the construction industry could be exposed to asbestos or another harmful contaminant, which may not pose a health issue until after retirement. An occurrence-based insurance policy could provide coverage for those health expenses.

What is important to know about an occurrence-based insurance policy?

Because of the advantages of an occurrence-based insurance policy, some potential workers could be more inclined to take a job with this benefit when given multiple opportunities for employment. There are other things to know about an occurrence-based insurance policy:

  • Occurrence-based insurance is distinguishable from a claims-made policy, which refers to an insurance policy that provides coverage when a claim is made against it, regardless of when the claim event occurred.
  • An occurrence-based policy only covers claims made when the policy is active, unless a ‘tail’ extension is secured.
  • An occurrence-based policy is generally more expensive than a claims made policy because there is no limit on the time during which a claim must be reported.