How Insurance Companies Try to Use Past Events to Defeat Coverage of New Claims

Liability insurance policies tend to fall into one of two categories based on the trigger of coverage: occurrence and claims-made policies. Generally speaking, under an occurrence policy, coverage is triggered if the underlying accident (i.e., the “occurrence”) for which a party seeks to hold the policyholder liable takes place while the policy is in effect, regardless of when the subsequent claim I made. In contrast, under a claims-made policy, coverage is triggered if a claim (usually defined as a written demand for relief) against the policyholder is first made and reported to the insurance company during the policy period, regardless of when the underlying “wrongful acts” that gave rise to the claim took place.