occurrence basis
Definition
Occurrence basis describes a type of insurance policy that covers you for any incident that happened while your policy was active, even if you file the claim years after the policy expired. This means the coverage follows the event itself, not the timing of when someone decides to sue you.
Example
You had an occurrence basis policy in 2018 and a customer slips in your store that year, but they don't sue you until 2023 when your policy is long gone and you have a different insurer. Your 2018 policy would still cover that claim because the incident occurred during that coverage period.
Watch Out
The alternative to this is a claims-made policy, which only covers you if both the incident and the lawsuit happen while your policy is active, so always confirm which type you have before letting a policy lapse.
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This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.