Occurrence Basis

What Does Occurrence Basis Mean?

Occurrence basis is a type of commercial liability insurance that provides coverage for liabilities arising from events that occur during the policy period. This coverage applies even if the claim is filed after the policy has expired, as long as the incident happened while the policy was active.

Insuranceopedia Explains Occurrence Basis

An occurrence basis policy is one of two main types of commercial liability insurance, the other being a claims-made policy. A claims-made policy provides coverage only if both the incident and the claim occur during the policy period.

In contrast, an occurrence basis policy covers incidents that happen during the policy period, regardless of when the claim is filed, even if it occurs years after the policy has expired. The key requirement is that the triggering incident occurred while the policy was active.

For example, if a business holds an occurrence basis liability insurance policy from January 18, 2018, to January 18, 2019, they are covered for incidents occurring within that timeframe. If the policy is not renewed in 2019, but a lawsuit is filed in February 2020 for an event that happened in November 2018, the insurer will still provide coverage since the incident occurred during the policy period.