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ARI Blog: Article

Occurrence Form vs. Claims-made Form


For most commercial insurance policies for restoration contractors, two coverage forms determine how your insurance policy will respond to a claim: an occurrence form and a claims-made form.

We want to spend the next two posts talking about these two forms and how they can affect your restoration company in case of a claim.

Occurrence Form

The occurrence form is the most common type of coverage form for commercial insurance. Aside from professional and executive liability policies, the approach occurrence is the prevailing coverage on almost every other procedure.

The term “occurrence” relates to the moment the claim/injury happens. Then, once the date of “occurrence” is established, the policyholder knows which policy (or policies) will respond to the incident. The approach in force at the time of the incident will be the one to defend the policyholder and possibly pay the damages resulting from the claim.

Unfortunately, as simple as the concept sounds, several legal theories are used to identify when the claim occurs. Every state is another, and any one of the following precedents could be used to determine the occurrence that approach several legal theories are used to identify :

1. Injury-in-Fact: Some states consider that the date of ANY actual bodily injury or property damage is the date of occurrence, regardless of the date of manifestation. (For example, the day the nail was driven into the electrical wire.)

2. Manifestation Theory: Most states consider the date the injury manifests itself or becomes most evident as the occurrence. (i.e., the day the fire starts because of the nail driven into it. )

3. Exposure or Continuous Trigger Theory: Known by two different names, this is when the courts consider dates of exposure as the dates of occurrence. This usually means multiple occurrence dates and policies will be involved in the litigation and settlement of the claim. This theory is usually only used for pollution or other claims with a potential for a long exposure period.

Any of the triggers for restoration contractors could apply above, depending on your policy and the type of claim. For example, general liability and business auto policies can quickly determine which approach will respond. A pollution policy involving mold or asbestos, or similar exposure risk usually includes multiple policies and operations from each insurance company.

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