Claims-Made vs Occurrence Policies: The Difference

The difference, side by side.

What decides which policy pays is the “trigger”: when the injury or damage happened, or when the claim is made.

	Occurrence	Claims-made
Which policy pays	The one in force when the injury or damage happened^{1, 2}	The one in force when the claim is made against you and reported to the insurer^{1, 3}
A claim years later	Goes to the old policy, even after it has ended, so there’s no need for run-off cover⁵	Isn’t covered by a policy that has ended, even if the work was done while it was in force⁴
Work done earlier	The date of the injury or damage decides¹	Covered only back to the policy’s retroactive date^{1, 4}
Usually used for	Public and products liability^{1, 2}	Professional indemnity, D&O, management liability and cyber liability^{1, 3, 4, 6}

Look for the words “claims made and notified”. DUAL’s management liability wording puts it this way: “We shall only cover you for claims made against you during the insurance period and notified to us as soon as practicable during the insurance period”³. See public liability vs professional indemnity for what each covers.

Retroactive dates and switching insurers.

A claims-made policy looks back only as far as its retroactive date, and a new policy won’t cover problems you already knew about.

Retroactive date “A date in a ‘claims made’ policy on or after which acts or omissions are covered”⁷. If a policy doesn’t cover events before it started, the insurer must tell you so in writing before you buy it⁸.
An example In Berkley’s example, an engineering firm’s first policy starts on 1 June 2020, with that as its retroactive date. A claim in 2021 about design work from 2018: “the policy would not respond”⁹.
What you already knew New policies exclude claims from circumstances you knew about before they started. Allianz excludes circumstances notified, “or which ought reasonably to have been notified”, under a previous policy^{1, 4}.
Changing insurer CGU covers a known circumstance you didn’t report earlier only if it was your insurer when you first knew of it and has been “without interruption” since¹. A new insurer may also refuse to keep your old retroactive date⁹.

In a 2024 complaint about a broker, a business had moved its management liability cover to a new insurer. When a former shareholder and employee sued, the new insurer refused the claim because the business had known of the matter and not disclosed it. AFCA accepted that no insurer starting a new claims-made policy would have covered circumstances already known¹⁰.

Reporting early: section 40(3).

The law lets you lock a possible claim into the policy you have now, before anyone has claimed.

What the Act says If you gave the insurer written notice of “facts that might give rise to a claim”, as soon as reasonably practicable and before the cover expired, the insurer isn’t relieved of liability for the claim “by reason only that it was made after the expiration” of the cover⁸.
In plain words If you tell your insurer in writing about a problem that could lead to a claim, soon after you learn of it and before the policy ends, that policy still responds when the claim comes, even after it has ended⁸.
How a policy puts it Emergence’s cyber wording: “If you give written notification of facts, the policy will respond even though a claim arising from those facts is not made against you until after the policy has expired”⁶.
Before you buy Insurers must explain this right to you in writing before the contract is entered into⁸.
That policy’s terms apply In a 2025 AFCA case, a doctor’s 2022 notice of an investigation tied criminal charges laid in 2024 over the same incident to his 2021–22 policy. That policy excluded criminal matters, and AFCA found for the insurer¹¹.

Timeframes

How long claims can follow you.

Claims-made cover only helps if a policy is in force when the claim arrives. Some published timeframes.

Building defects, NSW 10 years

After the work is completed, to bring a civil action. EP&A Act, s 6.20.¹²

CPA Australia members 7 years

The minimum for professional indemnity after they stop practising or retire. By-Law 9.8.¹³

Queensland ICT contracts 4 years

Claims-made policies kept after the contract ends, unless it sets another period.¹⁴

Federal digital panel 7 years

Professional indemnity kept after all contracts under the panel expire. DTA.¹⁵

Victorian government contracts can ask for insurance for up to 7 years after the goods or services are provided¹⁶. Our consultant and IT contractor guides list more contract terms.

Run-off cover when you stop.

Closing, selling or retiring ends a claims-made policy, but claims about your past work can still come.

What it is Cover “for a specified period after a business has closed, been sold, or a professional has retired”, which generally applies to claims-made insurance¹⁶.
What policies offer After a business closes or is sold, CGU may extend its professional indemnity policy to up to 84 months, at its discretion, for extra premium and within the same limit¹. If DUAL’s management liability policy isn’t renewed or replaced, you get 90 days to report claims about earlier acts, or 12 months, at DUAL’s discretion, for 100% of the annual premium³.
Retired directors DUAL gives directors and officers who retire 84 months of cover at no extra premium if the policy isn’t renewed or replaced³.
When it’s required Ahpra: “when you decide to cease practice you must take out appropriate run-off cover”. ASIC doesn’t require automatic run-off for financial services licensees, because “there is no market for automatic run-off cover”^{5, 7}.
Doctors The Commonwealth’s Run-Off Cover Scheme gives doctors who have stopped paid private practice “secure and free run-off insurance”¹⁷.

FAQ

Common questions.

What is a claims made policy?

A policy that covers claims first made against you, and reported to the insurer, while it’s in force, usually for acts on or after a retroactive date. Professional indemnity, D&O, management liability and cyber liability are usually written this way.

Is public liability claims made or occurrence?

Usually occurrence. The CGU and Vero public liability wordings we read cover injury or damage that happens during the period of insurance.

What is a retroactive date?

The date on or after which acts are covered by a claims-made policy. Work done before it isn’t covered, even if the claim arrives while the policy is in force.

What is run off cover?

Cover for claims made after a business closes or is sold, or a professional retires, about work done before then. It matters for claims-made policies such as professional indemnity.

Claims made vs occurrence: which is better?

Each type of cover is usually sold on one basis, so for most businesses it isn’t a choice. The difference matters most when you switch insurers, stop trading or retire.

What happens if I cancel my professional indemnity insurance?

Claims made after it ends generally aren’t covered, even for work done while it was in force, unless you told the insurer in writing about the facts before it ended, or you have run-off cover.

Still have a question? A broker can talk it through with you.

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Covers in this guide.

Our guides to what each cover generally does, what it costs and the rules that apply.

Professional Indemnity Insurance Public Liability Insurance D&O Insurance

Sources.

Combined Liability Package: professional indemnity and public and products liability (CV863 REV2), CGU, October 2025
Business Insurance PDS and Policy Wording, Vero, 4 June 2024
Management Liability Wording 11.20 v2, DUAL Australia
Office Pack PDS and Policy Document (POL963BA), Allianz, 9 April 2026
Fact sheet: Professional indemnity insurance arrangements, Ahpra, 6 January 2016
Cyber Event Protection (CEP-005.1): Important Information and Policy Wording, Emergence, February 2026
Regulatory Guide 126: Compensation and insurance arrangements for AFS licensees, ASIC, November 2024
Insurance Contracts Act 1984 (Cth), section 40, Federal Register of Legislation, compilation of 1 March 2024
What is the retroactive date?, Berkley Insurance Australia, 15 March 2024
Determination 1007605, AFCA, 6 June 2024
Determination 12-00-1097712, AFCA, 7 April 2025
Environmental Planning and Assessment Act 1979 (NSW), section 6.20, AustLII
Professional indemnity insurance (By-Law 9.8), CPA Australia
QITC Comprehensive Contract Conditions: ICT products and services (v2026.01), clause 21, Queensland Government, 2026
Panel Agreement for Digital Marketplace Panel 2 (version 3.0), Digital Transformation Agency, 29 September 2025
Insurance in procurement: goods and services guide, Buying for Victoria, 12 March 2026
About the Run-Off Cover Scheme (ROCS), Department of Health, Disability and Ageing, 6 June 2025