Occurrence-Based Policy

An occurrence-based policy covers you for incidents that happen during the policy period, regardless of when the claim is actually lodged. It is the standard basis for public liability and commercial property insurance in Australia.

The key difference from a claims-made policy is the trigger. With occurrence-based cover, what matters is when the incident happened, not when the claim was made.

Why It Matters

• Your public liability insurance almost certainly works on an occurrence basis.
• You’re covered for incidents during the policy period even if the claim comes in years later.
• This gives you a longer tail of protection compared to claims-made policies.
• Understanding the difference helps you avoid gaps when you have both PL and PI cover.

How It Works

• An incident happens while your policy is active (for example, a customer slips in your shop in March 2025).
• The customer doesn’t lodge a claim until September 2026.
• Your 2025 policy responds because that’s when the incident occurred.
• It doesn’t matter that the claim was made after the policy expired.

Simple Examples

• A visitor trips on a loose tile at your business premises in January. They don’t make a claim until the following year. Your public liability policy from January’s period responds.
• A product you sold causes property damage six months after purchase. The buyer claims against you a year later. Your occurrence-based policy from the time of sale covers the incident.
• A fire damages your commercial property during the policy period. Even if the full extent of damage takes months to assess and claim, the policy that was active when the fire happened responds.

Occurrence-Based vs Claims-Made

Common Mistakes or Misunderstandings

• Assuming all policies work the same way. Your public liability is occurrence-based but your professional indemnity is claims-made. They respond to claims differently.
• Thinking you don’t need to report incidents promptly. Even with occurrence-based cover, late reporting can cause problems. Always report incidents as soon as possible.
• Confusing the policy period with the claim period. The incident must happen during the policy period. The claim can come later.

When to Speak to a Broker

If you’re not sure whether your policies are occurrence-based or claims-made, or you want to understand how they work together, your broker can explain it in the context of your specific cover.

Need help?

If you want to understand how your policies respond to claims, reach out to Tank Insurance and we’ll walk you through it.

Related Terms

• Claims-Made Policy - The alternative trigger basis used for professional indemnity and similar policies.
• Principle of Indemnity - Both occurrence and claims-made policies aim to put you back in the position you were in before the loss.