Claims Made vs Occurrence: Which Policy Pays, Run-Off Cover and Retroactive Dates

For general counsel, CFOs and partners, the difference matters most at three moments: switching insurer, selling or closing a business, and spotting a problem shortly before renewal. This guide explains how each trigger works, the run-off, retroactive date and notification rules that sit around them, and how to choose.

Claims made vs occurrence: the short answer

The short answer is that a claims-made policy looks at the date the claim is made, and an occurrence policy looks at the date the harm occurred. Hiscox describes a claims-made policy as one that will pay out for any valid claim made during the (typically 12-month) policy period, regardless of when the incident or alleged breach of duty actually occurred, and a claims-occurring policy as one that pays only for loss or damage that actually happens during the policy period, even if it comes to light much later. In the UK market the occurrence trigger is often called "claims occurring", "losses occurring" or "claims arising", so the label on a schedule may vary while the concept stays the same.

The practical consequence is about time. With occurrence cover, the policy that was in force when the event happened stays responsible, so an old policy can be called upon decades later. With claims-made cover, the old policy generally falls away when it expires, and protection for past work depends on keeping continuous cover in place, or buying run-off when you stop.

Feature	Claims made	Occurrence (claims occurring)
What triggers cover	Claim first made against the insured during the policy period	Injury, loss or damage happening during the policy period
Which policy responds	The policy in force when the claim is made (or when a related circumstance was notified)	The policy in force when the event occurred, even if the claim is years later
Typical UK covers	Professional indemnity, directors' and officers', some other liability lines	Public liability, products liability, employers' liability
Past acts	Covered back to the retroactive date, or without limit if there is none	Not relevant: each year covers events in that year
After the policy ends	No cover for new claims unless circumstances were notified or run-off is bought	The old policy still covers events from its period
Key risk	Gaps on switching insurer, retiring or selling	Losing track of old insurers and policy records
Cost pattern	Cheaper at first, rising as exposure builds; run-off cost at the end	Priced for future claims from the start; no tail to buy

How a claims-made policy works

A claims-made policy covers a claim if it is first made against you during the policy period, or if it arises from circumstances you notified to the insurer during that period. The clearest statement of that two-limb test is in the Solicitors Regulation Authority's Minimum Terms and Conditions, which require solicitors' professional indemnity cover to respond where a claim is first made against an insured during the period of insurance, or is made during or after that period but arises from circumstances first notified to the insurer during the period of insurance. Commercial professional indemnity wordings for consultants, accountants, engineers and architects follow the same structure, though the detail varies by insurer.

Two consequences follow. First, the policy you hold today can pay for a mistake made many years ago, because the trigger is the claim and not the error. Hiscox notes that, depending on the retroactive date, a current claims-made policy may cover claims arising out of work done over many years. Second, the policy you held last year usually will not pay for a claim made today, unless you told that insurer about the problem before it expired. That is why continuity matters so much: a claims-made buyer is protected only as long as an unbroken chain of policies, or a run-off policy, sits behind them.

The ICAEW makes the same point for accountants: professional indemnity insurance is a claims-made policy, so the policy must be active at the time the claim is made for coverage to apply, and a claim made a few years after a firm closes will not be covered by the policy that was in force when the work was done. For firms that work with professional liability lawyers on negligence claims, that timing rule is often the first coverage question to settle.

How an occurrence policy works

An occurrence policy covers injury, loss or damage that happens while the policy is in force, so the date of the event, not the date of the claim, decides which policy pays. If a customer slips in your premises in March 2024, the public liability policy in force in March 2024 responds, whether the claim arrives in 2024 or several years later, and even if you have since changed insurer or stopped buying that cover altogether.

Employers' liability insurance shows how long the tail can be. Hiscox points to employees exposed to asbestos many years ago, who were entitled to cover under the employers' liability insurance in force at the time of exposure. The difficulty was not the trigger but the paperwork: some employees could not claim because the employer, or its insurer, and therefore the policy records, no longer existed.

That history explains the record-keeping advice in the Health and Safety Executive's guide to the Employers' Liability (Compulsory Insurance) Act 1969. Employers must be insured for at least £5 million, and the HSE notes that most insurers offer at least £10 million. Since 1 October 2008 there has been no legal requirement to keep out-of-date certificates, but the HSE strongly advises employers to keep a complete record of their employers' liability insurance, because some diseases appear decades after exposure. For an occurrence buyer, the archive of old policies is part of the cover. Businesses restructuring their workforce with employment lawyers, or working through the Employment Rights Act 2025 employer checklist, should add the employers' liability archive to the list.

Is public liability claims made or occurrence? Which covers use which basis

In the UK, public liability and products liability are usually written on an occurrence basis, while professional indemnity and directors' and officers' cover are usually written on a claims-made basis. The professional indemnity provider NBS Underwriting summarises the split in its August 2026 note on which policy responds: professional indemnity is generally written on a claims-made basis, while public liability and products liability are commonly occurrence-based. Howden, the broker, explains that professional indemnity and directors' and officers' policies, as well as certain other liability policies, operate on a claims-made basis, and contrasts them with occurrence-based insurances, where the policy on foot when the incident takes place responds.

Cover	Usual UK basis	What to check in the wording
Professional indemnity	Claims made	Retroactive date, circumstance notification clause, run-off terms
Directors' and officers'	Claims made	Prior circumstances exclusion, run-off on a sale or change of control
Public liability	Occurrence	Definition of the occurrence and the limit per event
Products liability	Occurrence	Whether the limit is per event or in the aggregate for the year
Employers' liability	Claims occurring	At least £5m limit; keep every certificate and schedule

"Usual" is not "always". A policy is whatever its wording says, and Hiscox warns that two products with the same name, both written on a claims-made basis, may cover different things and operate quite differently. The operative clause is normally the insuring clause on the first page of the wording. If it refers to claims "first made against the insured during the period of insurance", the policy is claims made; if it refers to injury, loss or damage "occurring during the period of insurance", it is occurrence based. Cyber cover, a newer and fast-changing line (see our earlier piece on the direction of the cyber insurance market), should be read the same way rather than assumed.

A claims-made policy example: one fire, three policy years

The cleanest way to see the difference is a single event that engages both kinds of cover. NBS Underwriting gives this example. In 2019 an architect designs a block of flats with defective fire stopping and compartmentation. In 2022 a roofing contractor's hot works start a fire that destroys the building, and the architect's defects let the fire spread faster. In 2024 the building owner sues both. In 2026 flat owners bring further claims.

• The contractor's public liability. It is occurrence based, so the policy in force in 2022, when the fire happened, is the one likely to respond, whoever insures the contractor in 2024 or 2026.
• The architect's professional indemnity. It is claims made, so the policies in force in 2024 and 2026, when the claims were made, are the likely ones. The 2019 policy, in force when the design work was done, is not the trigger.
• The architect's notification choice. If the architect had told its 2024 insurer about the risk of further claims from flat owners, the 2026 claims could attach to the 2024 policy instead, under the deeming provision.

NBS's conclusion is that the same incident can engage different policies and policy years for different parties. It suggests identifying three dates for every claim: the event date, the claim date and the date of any earlier notification. For contractors and consultants on construction projects, where defects can lie hidden for years, that three-date check is the start of any coverage analysis.

Retroactive dates and claims-made cover

A retroactive date is the earliest date from which a claims-made policy will cover past work: errors before that date are excluded even if the claim is made during the policy period. Hiscox explains that a claims-made policy covers work as far back as the start date of the policy or the retroactive date, if your policy has one. The further back the retroactive date sits, the more of your past work the current policy protects. Howden notes that insurers may restrict cover for past acts in some situations, for example on a change of control of the insured or where it has a particularly poor claims record.

The retroactive date is where a careless switch of insurer can do most damage. If a new policy carries a later retroactive date than the old one, work done between the two dates is left outside the new cover, even though the firm never had a gap in its insurance. Buyers should check the retroactive date on every renewal schedule and refuse a reset unless they have bought separate cover for the earlier period.

Some regulators remove the risk entirely. The SRA's Minimum Terms and Conditions state that solicitors' cover must not exclude or limit the insurer's liability for claims arising from acts or omissions which occurred prior to a specified date. In other words, there is no retroactive date in qualifying cover for SRA-authorised firms. The same rules set a minimum of £3 million for any one claim for recognised and licensed bodies and £2 million in all other cases, with no monetary limit on defence costs.

Notification of circumstances: the clause that bridges policy years

A notification of circumstances is a report to your current insurer of something that may give rise to a claim, made before any claim exists; if it is valid, a later claim arising from it is treated as made during the policy year in which you notified. Howden describes the effect: if a circumstance is properly notified, any claim arising out of the circumstance will be deemed to have been made during the policy period in which the circumstance was notified. Insurers will look closely at whether the later claim is causally connected to what was notified.

The Court of Appeal applied those principles in Euro Pools plc v Royal & Sun Alliance Insurance plc [2019] EWCA Civ 808. Euro Pools, a swimming pool installer, held professional indemnity policies with RSA for 2006 to 2007 and 2007 to 2008. The question was which policy year the cost of fixing faulty pool booms belonged to: the first policy carried a £5 million limit of indemnity, and attaching the costs to the second would have opened a separate limit. The court confirmed that an insured may notify a "hornet's nest" or "can of worms", meaning a problem whose scale and consequences are not yet known, and that there must be a causal, not merely coincidental, link between the notified circumstances and the later claim. It allowed RSA's appeal and held that, because the potential claims arose from circumstances already notified under the first policy, they attached to that policy and its single limit.

The lesson cuts both ways. Early, broad notification protects you against a gap. It also ties every related claim to the year of notification, and to that year's limit, so a notification should be drafted with the limit in mind. Hiscox gives the positive version: a management consultancy notifies an unhappy client to its insurer in month 11, moves to a new insurer, discloses the issue (which the new policy excludes), and is still covered by the old insurer when the claim arrives. In-house teams and claims-handling specialists should treat the notification clause as a deadline, not an option.

Switching insurer and the duty of fair presentation

Switching insurer on a claims-made policy is safe only if every known circumstance is notified to the outgoing insurer and disclosed to the incoming one. Under section 3 of the Insurance Act 2015, before a contract of insurance is entered into, the insured must make to the insurer a fair presentation of the risk, which includes disclosing every material circumstance it knows or ought to know, or at least giving enough information to put a prudent insurer on notice to ask more.

Howden explains the squeeze this creates. If you disclose an event likely to lead to a claim, the new insurer may simply exclude it, and professional indemnity and D&O policies will almost always carry a prior circumstances exclusion as well. If you have not notified the same matter to your current, expiring policy, you can end up with no cover at all: the old policy is claims made and no claim has arrived, while the new policy excludes the matter. NBS describes the same gap: a problem identified but not notified may be excluded by the later policy as a prior known circumstance, while the earlier policy may be unavailable because its notification requirements were missed.

Timing also affects price. Howden reports seeing renewal terms amended or withdrawn after circumstances were notified just before renewal, and insureds having to extend an expiring policy to buy time. Its practical advice is to build internal reporting so that people know to report circumstances as well as claims, and to run periodic sweeps outside the renewal cycle. Howden also notes that the duty of fair presentation applies to policies governed by UK law; policies under other governing laws may have different disclosure duties, which matters for groups buying cover through branches and subsidiaries abroad.

Run-off cover: protecting past work after you stop

Run-off cover is a claims-made policy for a business that has stopped trading, sold or merged, so that claims about its past work, made after it ceases, are still insured. It is the claims-made answer to the tail that occurrence cover handles automatically. Medical Protection calls the equivalent for doctors extended reporting benefits, also known as tail cover.

For solicitors it is compulsory. The Law Society explains that SRA-authorised firms must have professional indemnity insurance including run-off cover, and that run-off cover lasts for six years after the firm's PII has ended. The insurer at the time of cessation must provide six years from the expiry of the policy, even if the firm ceases part way through the year. Its own example: a firm that ceased without a successor on 1 August 2010 was covered for the rest of the indemnity period to 30 September 2010 and then for a further six years to 30 September 2016. Run-off is not needed if a successor practice takes on the risks of the prior practice and an insurer will cover both.

The reason it matters is the timing of claims. The Law Society says most claims are made at the time of, or soon after, discovery of the error, but about 40% are made more than three years after the event; its example is a client who discovers negligent conveyancing advice only when selling the property years later. Claims can also arrive after six years because of limitation provisions that extend time, which is why the profession has supplementary run-off cover beyond the six-year period.

For accountants, the ICAEW's PII Regulations require members at the date of cessation to have cover in place for at least two years after the practice ends, and then to take all reasonable steps to keep cover for a further four years, six in total. The ICAEW says the six-year period aligns with the general statutory limitation period for professional negligence claims. It also warns that very few insurers will provide run-off for a risk insured elsewhere before cessation, and that insurers usually want to have held the risk for at least two years before offering a six-year block. Owners planning an exit with M&A advisers, or facing a company going into administration, should raise run-off early, because it is far easier to arrange with the incumbent insurer.

Claims made vs occurrence cost: what you pay and when

Over a full career or business life the two bases can cost broadly the same; what differs is when you pay. Medical Protection, the medical defence organisation, explains that claims-made cover starts cheaper, while occurrence-based pricing reflects expected future claims, including those that surface after the member stops practising, and it describes the overall cost of the two as broadly similar over the course of a career.

The claims-made buyer pays the deferred part at the end, as run-off. The Law Society says solicitors' run-off usually costs about two to three times the last annual premium, which, because it covers six years, works out at roughly half of what six years of full cover would have cost. The cost is unregulated, so the SRA cannot waive it, and the Law Society advises budgeting for it as part of retirement or succession planning and considering it when comparing quotes.

The ICAEW adds that the first year's run-off premium is generally similar to the premium paid while trading, because insurers see as much chance of a claim in the early years of run-off as when the firm was active, with premiums expected to fall later.

Stage	Claims made	Occurrence
First years of cover	Lower premium: few past years are exposed	Full premium: future claims from each year are priced in
Mature business	Premium reflects many years of past work	Premium reflects the current year's activity
Switching insurer	Check retroactive date; notify circumstances to the outgoing insurer	No tail issue; keep the old policy records
Retirement, sale or closure	Buy run-off or extended reporting (solicitors: about two to three times the last annual premium)	Nothing further to buy for past years
Claims after death	Need run-off in place to protect the estate	Covered by the policy from the year of the event

Medical Protection also makes a point that applies to every professional: claims can be made against you after you retire, and even after you die, in which case they are made against your estate. Without run-off, a claims-made buyer's estate may have no insurer to turn to.

How to choose: claims made vs occurrence for your business

For most businesses the market makes the choice, because the line of cover usually comes on one basis only; the real decision is how to manage the risks of the basis you are given. Where you do have a choice, or are comparing quotes on different bases, these criteria help.

• Choose occurrence if you want each year closed off for good, expect to retire, sell or wind up within a few years, or cannot be confident of buying continuous cover in future. You will pay more at the start, but there is no run-off bill and no retroactive date to protect.
• Choose claims made if you are early in your career or a new business and want lower premiums now, expect to keep continuous cover for many years, and can budget for run-off at the end. It also lets you buy limits that reflect today's values, rather than relying on a limit set years ago.
• If the line is claims made by market practice (professional indemnity, D&O), focus on continuity: protect the retroactive date, build a circumstance reporting process, and plan run-off before any sale or closure.
• If the line is occurrence by market practice (public and employers' liability), focus on records: keep every schedule and certificate, and note insurer names and policy numbers in the company's permanent files.

Question	Points towards claims made	Points towards occurrence
How long will you keep buying this cover?	Many years, continuously	Uncertain, or ending soon
Can you afford a run-off premium at exit?	Yes, and it is budgeted	No, or you prefer certainty now
How long is the tail of claims?	Moderate, and limits need to keep pace with values	Long, such as latent disease or hidden defects
Is a sale, merger or retirement planned?	Only if a successor will take on the past risks	Yes: occurrence avoids a run-off negotiation
Does a regulator dictate terms?	SRA and ICAEW cover is claims made with mandatory run-off	Employers' liability is compulsory, with a £5m minimum

Whichever basis applies, the governance steps are similar: a named owner for insurance in the business, a register of circumstances, a calendar that flags notification and renewal deadlines, and a file of every policy ever held. Risk management advisers can help build that framework.

When to bring in a broker or coverage lawyer

Bring in specialist help whenever a claims-made gap could open: before you change insurer, before you notify a significant circumstance, before a sale, merger or closure, and as soon as an insurer disputes which policy year a claim belongs to. A specialist broker can compare wordings, protect the retroactive date and negotiate run-off; a coverage lawyer can draft notifications that satisfy the causal-link test and challenge a declinature.

Corporate INTL's directory lists insurance specialists and dispute resolution lawyers who handle coverage disputes, as well as insolvency and restructuring advisers who deal with run-off when a business fails, and advisers across the United Kingdom. Check that any intermediary is genuinely authorised: the FCA's warning about fake insurance sold on social media is a reminder that a policy is only as good as the firm that placed it. For a different kind of trigger altogether, see our analysis of what war risk insurance covers.

Frequently asked questions

What is the difference between an occurrence-based and a claims-made policy?

A claims-made policy covers claims first made against you during the policy period, or arising from circumstances you notified in that period, wherever the error sits in the past. An occurrence policy covers injury, loss or damage that happens during the policy period, even if the claim is made years after the policy has ended.

What's better, claims made or occurrence?

Neither is better in every case. Occurrence cover closes each year for good and needs no run-off, but costs more up front. Claims-made cover is cheaper early on and keeps limits current, but depends on continuous cover, a protected retroactive date and run-off when you stop. Over a career, the total cost can be broadly similar.

How do you tell if a policy is claims made or occurrence?

Read the insuring clause, usually on the first page of the policy wording. Wording about claims "first made against the insured during the period of insurance" means claims made. Wording about injury, loss or damage "occurring during the period of insurance" means occurrence. The schedule may also state a retroactive date, which only claims-made policies use.

Is public liability claims made or occurrence?

In the UK, public liability and products liability insurance are commonly written on an occurrence basis, so the policy in force when the injury or damage happened responds. Employers' liability is also written on a claims-occurring basis. Professional indemnity and directors' and officers' insurance are usually claims made. Always confirm from the wording, because insurers' approaches differ.

What does run-off insurance cover?

Run-off cover insures claims made after a business stops trading, sells or merges, about work it did while it was active. It is needed because claims-made policies only respond to claims made while a policy is in force. For SRA-authorised law firms it is compulsory and lasts six years after the firm's last policy ends.

Why is run-off cover six years?

The ICAEW explains that six years aligns with the general statutory limitation period for professional negligence claims in the UK. Claims can still arrive later in some cases, because limitation rules can extend time, which is why solicitors also have supplementary run-off cover beyond six years and why some firms buy longer run-off.

What is the retroactive date in professional liability insurance?

The retroactive date is the earliest date from which a claims-made policy covers past work. Errors made before it are excluded, even if the claim is made during the policy period. Check it when switching insurer, because a later retroactive date on the new policy leaves earlier work uncovered. SRA-qualifying cover for solicitors cannot carry a retroactive date at all.

What happens if I spot a problem just before renewal?

Notify it to your current insurer before the policy expires, and disclose it to the renewing or new insurer under the duty of fair presentation. The new policy will probably exclude it, but a valid notification means the expiring policy should respond to any later claim. Notifying late can also affect renewal terms, so report circumstances as they arise.

How much does run-off cover cost?

It depends on the firm, its claims history and the market. For solicitors, the Law Society says run-off usually costs about two to three times the last annual premium for the six years. The ICAEW says the first year's run-off premium for accountants is generally similar to the premium paid while trading, falling later if no claims arise.

Sources

1. Hiscox: Claims made vs claims occurring
2. Medical Protection: What's the difference between claims-made and occurrence-based indemnity? (August 2023)
3. NBS Underwriting: Understanding claims-made and occurrence-based cover, which policy responds? (August 2026)
4. Howden: Circumstance notification in PI and D&O, why do it and what to avoid
5. The Law Society: Run-off cover
6. Solicitors Regulation Authority: Indemnity Insurance Rules and Minimum Terms and Conditions
7. ICAEW: The importance of run-off cover
8. Health and Safety Executive: Employers' Liability (Compulsory Insurance) Act 1969, a guide for employers (HSE40)
9. Insurance Act 2015, section 3: the duty of fair presentation
10. Euro Pools plc v Royal & Sun Alliance Insurance plc [2019] EWCA Civ 808 (The National Archives)

About this article

This guide was researched and written by The Corporate INTL Newsroom, which covers cross-border legal, regulatory and business developments for lawyers, professional advisers and financiers in over 150 jurisdictions. It has been checked against legislation, regulators' rules and guidance, a Court of Appeal judgment and published insurer and broker material. It describes the position under the law of England and Wales; policies governed by other laws may work differently, and every policy turns on its own wording. This article is general information, not legal or insurance advice; for advice on a specific policy or claim, consult a qualified broker or adviser. Last reviewed 28 October 2026. For more analysis like this, visit the Corporate INTL newsroom or subscribe to Corporate INTL.