What is the difference between claims-made and occurrence policies?

A liability insurance policy functions as either a claims-made policy or an occurrence policy. The main difference is whether coverage applies after the policy expires.

Differences Between a Claims-made Policy and an Occurrence Policy

What is a claims-made policy?

The policy only covers incidents that occur and are reported within the policy’s timeframe unless a tail (or retroactive) coverage is purchased.*
If the policy is canceled or a premium isn’t paid, a claim will not be covered, even if the incident occurred during the period when the policy was active.

What is an occurrence policy?

The policy has lifetime coverage for incidents that occur during a policy period but can be reported outside the policy’s timeframe.
The policy covers losses even if the claim is filed after the policy is canceled, as long as the covered incident occurred within the timeframe of the initial coverage.

Claims-made Policy Example

Pastor Paul purchased a claims-made liability policy for his church in 2016, continued coverage through 2018 and then canceled the policy. In 2025, Pastor Paul was sued for a covered cause of loss that occurred in 2017.

Is the claim covered? No. Since the claims-made policy is no longer in effect, Pastor Paul is personally liable to pay for damages instead of his previous insurance carrier.

Occurrence Policy Example

Minister Mike purchased an occurrence policy for his ministry in 2016 but switched to a new insurance provider in 2021. Minister Mike was sued in 2025 for a covered cause of loss that occurred in 2018.

Is the claim covered? Yes. He is covered by his original occurrence policy because it was active at the time of the incident. The coverage would fall under the policy he carried during the time the incident occurred.

Claims-made Policy: What to Look for on the Declarations Page

If you look at the declaration pages from your commercial liability insurance policy, claims-made liability policies will generally be easy to find. It’s frequently listed at the top of the first declaration page, stating “This is a Claims-Made Policy”. It is also found in what is often called “Professional Liability”, or the liability assumed because of a profession. In the ministry context, we generally see this in the following six types of liability:

Employment Practices Liability
Directors and Officers Liability
Employee Benefits Liability
Counseling or Pastoral Professional Liability
Cyber Liability
Sexual Acts Liability

Occurrence Policy: Protection for Years to Come

Occurrence coverage can help protect your ministry from legal action for years to come, regardless of when a claim is filed. This long-term protection can help lessen the financial impact and minimize the burdens of potential incidents.

Need more guidance for property and casualty needs?

At GuideStone^®, we come alongside you with property and casualty resources, including a guide to church volunteer management and tips to help prevent discrimination and harassment. For a risk assessment or more information, contact us at PCSalesSupport@GuideStone.org or (214) 720-2868, Monday through Thursday, from 7 a.m. to 4:30 p.m. CT and Friday, from 7 a.m. to 4 p.m. CT.

This article is for informational purposes only. It is not intended to be construed as legal advice. Readers should use this article as a tool, along with best judgment and any terms or conditions that apply, to determine appropriate policies and procedures for your church's risk management program.

*Tail coverage can be purchased from the company offering claims-made to extend the reporting period.

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Property and Casualty