When you're buying contractor insurance, you'll see two types of coverage triggers: "occurrence" and "claims-made." The difference sounds like fine print — but it has real-world consequences, especially for contractors who face construction defect claims years after a project is complete.
What "Occurrence" Means
An occurrence policy covers claims arising from incidents that happened during the policy period — even if the claim is filed years later. If you complete a roofing job in 2023 and a homeowner discovers leaks caused by your work in 2026, your 2023 policy responds, as long as it was an occurrence policy with completed operations coverage — even if you've since switched carriers.
What "Claims-Made" Means
A claims-made policy only covers claims that are filed while the policy is active — regardless of when the underlying incident occurred. If you had a claims-made GL policy in 2023, and that roofing claim is filed in 2026 after you've switched carriers or let the policy lapse, you may have no coverage at all.
- Retroactive date: Most claims-made policies have one — claims from incidents before that date aren't covered, even if filed while the policy is active.
- Extended Reporting Period (tail coverage): You can purchase a "tail" when canceling a claims-made policy, covering claims filed after cancellation for incidents that occurred while the policy was active. It can be expensive.
Coverage types that are typically claims-made: professional liability / E&O, directors & officers, employment practices liability, and some specialty surplus lines programs.
Which Do California Contractors Typically Get?
| Coverage | Typical Trigger |
|---|---|
| Standard General Liability | Occurrence (correct for most contractors) |
| Professional Liability / E&O | Claims-made (normal for this coverage type) |
| Workers Compensation | Statutory trigger (neither) |
| Some specialty / hard-to-place GL programs | Sometimes claims-made — generally less favorable |
The Completed Operations Question
Even with an occurrence policy, you need to confirm completed operations is included and not excluded. This covers claims arising from work you've already finished, distinct from ongoing operations. Many contractors don't realize their aggregate limit gets eroded by ongoing-operations claims, leaving less available for completed ops claims down the road. Check your declarations page — completed operations should show a limit equal to your general aggregate, not a reduced sub-limit.
What to Ask Your Broker
- "Is my GL occurrence-based or claims-made?"
- "Does my policy include completed operations in the aggregate, and is there a sub-limit?"
- "What is my retroactive date?" (if claims-made)
- "Do I have a separate products/completed operations aggregate?"
We review your policy forms and give you a plain-English explanation of exactly what you have — call us at (858) 367-0782 if you're not sure.
Frequently Asked Questions
Standard contractor general liability is almost always occurrence-based, written on the ISO CG 00 01 form. This is what you want — it covers incidents that happened during the policy period, even if the claim is filed years later.
Nothing changes for past work. An occurrence policy covers incidents that happened while it was active, regardless of which carrier insures you now or whether that policy has since expired.
Only if you carry claims-made coverage, like professional liability. Occurrence-based GL doesn't require tail coverage because past incidents remain covered by the policy that was active when they happened.
Some hard-to-place or surplus lines programs use claims-made GL to limit the carrier's long-tail exposure on higher-risk trades. It's generally less favorable for contractors and worth scrutinizing closely with your broker.
On a claims-made policy, the retroactive date is the earliest date an incident can have occurred and still be covered. Any incident before that date isn't covered, even if the claim is filed while the policy is active.