Occurrence vs claims-made liability forms

The same facts produce opposite answers depending on the trigger, which is exactly why this appears on the exam year after year. Work the question in two steps: identify the trigger, then check the retroactive date. Most wrong answers come from candidates who stop after step one, or who think an extended reporting period can rescue a loss that fell before the retroactive date.

Questions and answers, explained

All 8 questions above, with the correct answer and why it is correct. Everything here is on occurrence vs claims-made liability forms.

1. A roofing contractor's commercial general liability policy was written on an occurrence form and ran from 1 June 2019 to 1 June 2020. In February 2026 a homeowner sues, alleging water damage that took place in October 2019. The contractor has been insured by three different carriers since then. Which policy is triggered?

   • AThe 2019–2020 occurrence policy, because the damage took place during its policy periodCorrect
   • BThe policy in force in February 2026, because that is when the claim was made
   • CNo policy, because the 2019–2020 policy expired years before suit was filed
   • DThe 2019–2020 policy, but only if an extended reporting period was purchased at expiration

   Why: An occurrence form is triggered by when the bodily injury or property damage takes place, not by when the claim is reported. Expiration of the policy does not matter: the 2019–2020 policy responds to October 2019 damage even though the claim surfaces six years later. Extended reporting periods belong to claims-made forms; an occurrence form needs no tail.

   Reference ISO CG 00 01 (occurrence form insuring agreement)

2. An architect carries professional liability written on a claims-made basis for the period 1 January 2026 to 1 January 2027. An alleged design error occurred in 2024. The injured party first makes a claim against the architect in March 2026. Assuming no retroactive date restriction applies, which policy is triggered?

   • AThe 2026–2027 policy, because a claims-made form follows the date of the claimCorrect
   • BThe 2024 policy, because coverage under any liability form follows the date on which the wrongful act was committed
   • CBoth policies, sharing the loss on a pro rata basis
   • DNeither policy, because the wrongful act and the claim fall in different policy periods

   Why: A claims-made form responds to claims first made against the insured during the policy period (and reported as the form requires), regardless of when the act occurred. An occurrence form responds to bodily injury or property damage that takes place during its period, no matter how many years later the claim arrives. So the same facts produce opposite answers depending on the trigger: under an occurrence form the 2024 policy would answer; under this claims-made form the current 2026–2027 policy does. The one caveat is the retroactive date, which the question expressly removes here.

   Reference ISO CG 00 01 (occurrence) vs ISO CG 00 02 (claims-made)

3. A restaurant group's CGL is written on a claims-made form with a retroactive date of 1 March 2024. The current policy period runs 1 March 2026 to 1 March 2027. On 1 June 2026 a customer makes a claim for an injury that happened on 15 November 2023. How does the current policy respond?

   • AIt covers the claim, because the claim was first made during the policy period
   • BIt covers the claim, subject to whatever aggregate remained in the 2023 policy year
   • CIt does not cover the claim, because the injury occurred before the retroactive dateCorrect
   • DIt covers the claim only if the insured elects the basic extended reporting period

   Why: A claims-made form requires two conditions to be met together: the claim must be first made during the policy period (or an applicable extended reporting period), and the injury must occur on or after the retroactive date. The November 2023 injury predates the 1 March 2024 retroactive date, so the coverage trigger fails no matter when the claim is reported. An extended reporting period lengthens the reporting window; it never moves the retroactive date backward.

   Reference ISO CG 00 02 (claims-made form; retroactive date)

4. A Fort Lauderdale contractor buys a claims-made general liability policy effective 1 June 2026 with a retroactive date of 1 June 2024. In September 2026 a homeowner sues over defective work the contractor performed in March 2023. How does the policy respond?

   • AIt defends and indemnifies, because the claim was first made during the policy period
   • BIt defends but does not indemnify, because a retroactive date restricts indemnity only
   • CIt does not respond, because the wrongful act predates the retroactive dateCorrect
   • DIt responds once the extended reporting period on the prior policy has been exhausted

   Why: A retroactive date is the earliest date of a wrongful act for which a claims-made policy will respond. Two conditions must both be satisfied: the claim must be first made during the policy period AND the act must have occurred on or after the retroactive date. The March 2023 work precedes the 1 June 2024 retroactive date, so no defense and no indemnity are owed. Note what an extended reporting period does and does not do: a tail extends the time in which a claim may be REPORTED after the policy ends — it never moves the retroactive date backwards. Advancing a retroactive date at renewal silently strips coverage for prior years and is a classic agent errors-and-omissions exposure.

   Reference ISO CG 00 02 (claims-made CGL) — retroactive date

5. At renewal, a manufacturer replaces its claims-made CGL with an occurrence form written by a new carrier. The risk manager wants protection for incidents that occurred during the claims-made years but that may not surface as claims for several more years. The best advice is to:

   • AAsk the new occurrence carrier to add a retroactive date matching the expiring policy
   • BRely on the automatic basic extended reporting period, which allows unlimited reporting time
   • CAsk the expiring carrier to advance the retroactive date forward to the expiration date
   • DPurchase a supplemental extended reporting period endorsement on the expiring claims-made policyCorrect

   Why: The reporting gap created when a claims-made policy is replaced is closed by a supplemental extended reporting period, or tail, bought from the expiring claims-made insurer. Occurrence forms carry no retroactive date, so asking the new carrier to add one is meaningless. The basic ERP attaches automatically but is limited in duration, not unlimited. Advancing the retroactive date forward to expiration would wipe out prior-acts coverage rather than preserve it.

   Reference ISO CG 00 02 (basic and supplemental extended reporting periods)

6. A commercial general liability policy shows a $1,000,000 each-occurrence limit and a $2,000,000 general aggregate. Three unrelated covered occurrences during the policy year settle for $900,000, $800,000 and $700,000, none of them products or completed operations claims. How much does the policy pay in total?

   • A$2,400,000, since each occurrence is under the per-occurrence limit
   • B$2,000,000, because the general aggregate caps the policy yearCorrect
   • C$1,000,000, the most payable regardless of the number of claims
   • D$3,000,000, since the aggregate applies separately to each claim

   Why: Two limits work together in Section III of the CGL. The each-occurrence limit is the most the insurer will pay for damages arising out of any one occurrence; the general aggregate is the most it will pay for the sum of all covered damages in the policy period other than products-completed operations. Each settlement here is below $1,000,000, so the per-occurrence limit never intervenes, but the three together come to $2,400,000 and the general aggregate stops payment at $2,000,000, leaving $400,000 uninsured. Option A is the trap for anyone who checks only the first limit on the declarations page. Two refinements are worth carrying into the exam: the products-completed operations hazard has its own separate aggregate, so losses there do not erode the general aggregate, and personal and advertising injury has its own limit that does erode it.

   Reference ISO CG 00 01 (Commercial General Liability Coverage Form) — Section III, Limits Of Insurance

7. A Miami manufacturer's CGL shows a $1,000,000 each occurrence limit, a $2,000,000 general aggregate and a $2,000,000 products-completed operations aggregate. Three product liability claims of $900,000 each are paid during the policy year. What is the result?

   • AAll three are paid in full, because product claims erode only the general aggregate, which is $2,000,000.
   • BAll three are paid in full, because the each occurrence limit applies separately to each of the three claims.
   • COnly the first is paid, because the $1,000,000 each occurrence limit caps all product claims combined.
   • DTwo are paid in full and the third is limited by the products-completed operations aggregate.Correct

   Why: Losses within the products-completed operations hazard erode a dedicated aggregate that is entirely separate from the general aggregate. Two payments of $900,000 consume $1,800,000, leaving only $200,000 of that aggregate for the third claim. A is the trap for a candidate who treats the general aggregate as one big pot: the general aggregate applies to all Coverage A and Coverage C payments except those falling within the products-completed operations hazard, so these claims never touch it. The each occurrence limit still caps any single claim at $1,000,000, but here it is the aggregate that runs out first.

   Reference ISO CG 00 01, Section III - Limits of Insurance

8. A CGL carries a $1,000,000 each-occurrence limit, a $2,000,000 general aggregate and a $2,000,000 products-completed operations aggregate. During the policy year the insurer pays $2,000,000 in settlements for injuries caused by the insured's finished products. A customer then slips and falls in the insured's showroom. What is available for the slip-and-fall claim?

   • A$1,000,000 per occurrence within the intact $2,000,000 general aggregateCorrect
   • BNothing, because the two aggregates draw on one shared $2,000,000 ceiling
   • C$1,000,000, but only if the general aggregate is reinstated at midterm
   • D$2,000,000, because losses paid under one aggregate restore the other

   Why: The ISO CGL contains two independent annual aggregates. The products-completed operations aggregate is the most the insurer will pay for damages within that hazard, and the general aggregate caps everything else under Coverages A, B and C. Payments that erode one aggregate do not erode the other. Having exhausted the products-completed operations aggregate, the insured still has the full $2,000,000 general aggregate for premises and operations claims, subject to the $1,000,000 each-occurrence limit for any single loss. Distractor B is the tempting error: candidates who remember only one 'aggregate' collapse the two into a single ceiling, which is how a personal liability policy behaves but not the commercial form. Aggregates do not reinstate at midterm, and payments never restore a limit.

   Reference ISO CG 00 01 04 13, Section III - Limits Of Insurance (general aggregate and products-completed operations aggregate)

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