How do occurrence policies differ from claims-made policies?

Occurrence policies are designed to cover incidents that happen during the policy period, regardless of when the claim is actually made. This means that as long as the event or incident occurs while the policy is in effect, the policy will respond to claims related to that incident, even if the claim is filed after the policy has expired.

This characteristic is critical because it provides long-term protection for insured parties, ensuring that even if they are sued years after an incident occurred, they are still covered by the insurance as long as the occurrence took place while the policy was active.

In contrast, claims-made policies are only effective if the claim is made during the policy period, which creates a different type of risk for the insured and a different kind of premium structure. It's also worth noting that claims-made policies are focused on when claims are made, rather than when the incident itself occurred, highlighting the fundamental difference between the two types of coverage.