On an occurrence policy, the year the injury or damage happens decides which policy answers; on a claims-made policy, the year the claim is first made decides. Most flooring contractors carry general liability on the occurrence form, and the difference matters most for a floor that fails long after the crew has packed up and left.
Two ways a liability policy decides which year answers
Every liability policy needs a rule for which policy year owns a claim, and there are two common answers: the date of the damage or the date of the claim. That rule is called the trigger, and it matters more to a flooring contractor than to most trades because the work sits in place for years.
The Texas Department of Insurance sets out both in its consumer publication on general liability insurance. On one side: “Occurrence policies cover claims arising from injury or damage occurring while the policy is in force, regardless of when the claim is first made.” On the other, for claims-made policies: “Claims arising from events outside the policy period or claims reported to the insurer outside the policy period are not covered unless special coverage is purchased or arranged with the insurer.”
An occurrence policy looks back from the claim to the damage and asks which policy was in force then. A claims-made policy asks which policy is in force on the day the claim arrives, then checks whether the damage falls inside the window that policy reaches back to.
Neither is better in the abstract, but the steps that protect you at renewal, at a change of insurer and at retirement differ for each.
How the standard general liability form sets the trigger
The standard general liability form is an occurrence form, and the trigger is written into its insuring agreement. Under the standard ISO form as commonly written, the Commercial General Liability Coverage Form (CG 00 01 04 13, the edition we read), Coverage A applies only if, among other conditions, “The ‘bodily injury’ or ‘property damage’ occurs during the policy period”.
That one line does the work. The date the floor went down does not set the policy year, and neither does the date the customer calls. The date the injury or damage happens does. The form also reaches damage that keeps developing: covered injury or damage “includes any continuation, change or resumption of that ‘bodily injury’ or ‘property damage’ after the end of the policy period”.
Two things are absent from the form. It carries no retroactive date and no extended reporting period, because an occurrence trigger needs neither: a policy that answers for damage during its own period stays answerable for that damage however late the claim comes in.
What the form does insist on is notice. Its conditions say: “You must see to it that we are notified as soon as practicable of an ‘occurrence’ or an offense which may result in a claim.” A late claim is not a problem under an occurrence trigger. Late notice of something you already knew about can be, so the safe habit is to report a known problem to the policy that was in force when it happened. The general liability page sets out what that policy answers for and what it hands off.
Why a failed floor tests the trigger years later
Flooring losses often surface well after turnover, so the install date, the damage date and the claim date can land in three different policy years. The form treats the work as finished even when it later needs attention: “Work that may need service, maintenance, correction, repair or replacement, but which is otherwise complete, will be treated as completed.”
Texas describes the exposure that follows: “Products/completed operations coverage pays for bodily injury and property damage that occurs away from your business premises and is caused by your products or completed work.” What completed operations covers, and the rule about damage to your own work, belong to the general liability page and the residential flooring page; the question here is only timing.
That timing is not always clean. A slow moisture problem or a gradual adhesive release may not have one obvious damage date, and when a gradual loss began is often disputed. The standard form does not fix the date of a slow failure beyond its trigger and its known-loss terms, so the wording of the policy and the facts of the claim decide.
Real-World Scenario: A flooring contractor installs sheet goods in a medical office and changes insurers at the next renewal. Some months later, moisture working through a failed seam begins to damage the cabinetry and wall finishes beside the floor. The office notices the staining only after another renewal and makes its claim then. On occurrence general liability, the contractor reports the claim to the insurer whose policy was in force when the cabinetry damage began, not to the current insurer, and keeps every old policy so that the right one can be found.
How a claims-made policy decides which year answers
A claims-made policy answers for a claim first made during its own period, as long as the damage came after the policy’s retroactive date. There is no claims-made general liability form we can quote here, so the mechanics come from regulators rather than the form.
New York’s Department of Financial Services sets minimum standards for claims-made policies, and its general counsel’s opinion on tail coverage under that regulation quotes the regulation’s definition. A claims-made policy covers injury or damage “including injury or damage occurring prior to the effective date of the policy, but subsequent to the retroactive date, if any”, and it does so “as long as the claim is first made during the policy period or any extended reporting period”. That opinion concerns an appraiser’s errors and omissions policy; we use it here only for the regulation’s definitions.
New York also requires a claims-made policy to tell the buyer what it is. Its form-filing compliance questionnaire for claims-made policies requires disclosure “That, except for the ERP, there is no coverage for claims reported after termination of coverage;” and that “unless the optional ERP is unlimited, coverage gaps may occur”. It also asks whether the policy is “written on a claims-made and reported basis”, a stricter variant where reporting counts as much as the claim itself.
On price, the questionnaire requires a warning “That rates are lower in the earlier years than for an occurrence policy, but insured should expect substantial increases.” That is a disclosure, not a reason to choose either form.
Retroactive dates and prior acts on a claims-made policy
The retroactive date is the fence at the back of a claims-made policy: damage before it is outside the policy, however recently the claim arrives. For a flooring contractor, every past job is covered only if the retroactive date reaches back before it.
Texas explains where to find it: “The retroactive date usually appears in the declarations page accompanying your policy. It may be the effective date of the policy or an earlier date.” A retroactive date equal to the policy’s start reaches nothing that happened before it; an earlier date reaches further back.
The same publication describes prior acts coverage: “Prior acts (‘nose’) coverage covers claims that arise from injury or damage occurring before the policy period, but reported to the insurer after the policy period begins.” It then marks the limit: “Prior acts coverage does not cover claims that were known at the time your policy began.”
The occurrence form has its own version of that limit. Coverage does not apply if a listed insured or authorized employee “knew that the ‘bodily injury’ or ‘property damage’ had occurred, in whole or in part” before the policy period. On either trigger, a floor you already know is failing is not something a new policy is buying. How to read the dates and forms on the first page of a policy is the subject of reading the declarations on a flooring policy, a companion post.
Tail coverage when you retire, sell or change insurers
Tail coverage, or an extended reporting period, lets a claims-made policy answer claims made after it ends, and it is the decision that matters when a flooring business closes, sells or moves its coverage. Texas defines it this way: “Run-off (‘tail’) coverage, also called ‘extended reporting period,’ pays for residual claims made after your policy expires.”
The New York opinion states the purpose: “the obvious benefit received from tail coverage is that it extends for an additional time period coverage for claims made after termination of a policy, arising from liabilities incurred during the course of the policy while it was still in effect.”
Switching insurers is where gaps open. If the new insurer sets a fresh retroactive date, older jobs fall outside it. Texas advises that on expiration, cancellation or nonrenewal “you should purchase either run-off coverage from your previous insurer or prior acts coverage from your new insurer to prevent coverage gaps.”
Occurrence coverage has a quieter version of the same problem. Because it answers only for damage during its own period, a floor whose damage first appears after the last policy ends may reach no policy at all. Before you retire or wind down, ask how floors already in place will be answered; the hub on flooring contractor insurance shows how the policies fit together, and an umbrella sits over them rather than replacing either trigger.
What general contractors and public owners write into the contract
Many public owners and general contractors require occurrence general liability by default and accept claims-made coverage only on conditions. A flooring subcontractor whose policy does not match can be told outright that it does not comply.
The University of Colorado’s construction contract insurance requirements state that “unless otherwise specified, all policies must be written on a per occurrence basis.” Where it allows a claims-made line, on its pollution liability requirement, it adds conditions: “If the coverage is written on a claims-made basis, the Contractor warrants that any retroactive date applicable to coverage under the policy precedes the effective date of this Contract; and that continuous coverage will be maintained or an extended discovery period will be exercised”.
A New York state agency’s contract insurance exhibit, written for a services contract rather than construction, takes the same line: “all policies of insurance required by this Attachment shall be written on an occurrence basis.” Claims-made forms are a fallback, considered only where “occurrence-based coverage is not commercially available”, and then only with provisions for “reporting circumstances or incidents that may give rise to future claims” and for a tail “with respect to events that occurred but were not reported during the term of the policy.” The same exhibit asks for general liability on the current ISO occurrence form or an equivalent.
The rest of a contractor’s insurance exhibit, from additional insured status to keeping coverage in force for the whole job, is on the commercial flooring page. Requirements vary by state and owner; see our pages for Texas, New York and Colorado.
Holding both triggers at once
Many flooring contractors carry both triggers at the same time: occurrence general liability for injury and physical damage, and a claims-made professional policy for advice and design decisions. That mix is normal, but it means two different sets of renewal habits.
On the general liability side, keep old policies and report known problems to the policy in force when they happened. On the professional side, watch the retroactive date and keep coverage continuous. The professional rules are set out in the claims-made timing section of our professional liability post, and we do not repeat them here.
Some losses turn on whether the property was in your care when it was damaged, which the companion post on the care, custody or control exclusion for flooring contractors takes up.
If you are not sure which trigger each of your policies carries, or a subcontract asks for occurrence coverage you may not have, send us the policies and the contract. You can read more about how we work with flooring businesses.