Occurrence is classified as an occasion that activates coverage in the policy. Occurrence is frequently liken with accident, however, several policies identify occurrence to take in the repeated or continuous exposure that results in the bodily injury and/or damage to property intended by the insured. It is an event resulting to a loss to a 3rd party because of destruction. Majority of insurance plans lays down that every loss from similar general grounds are considered as a result from a particular occurrence and such are limited to the measure of occurrences permitted in insurance policies. And also, such particular loss is differentiated from accidents such that the loss do not have to remain as sudden or fortuitous, intended or expected and will result from repeated or continual exposure in the happening of harm.
Occurrence includes any events further than accidents; it is a kind of event which also signifies one notable occurrence, like major world experience. Any incident can be applied into a slight occurrence; the term can also be referred to a separate event with sharp significance and identity.
In purchasing liability insurance one can avail on either a “claims-made policy” or the occurrence policy. Occurrence policy in one hand may cover claims completed months or yet, in years following the happening of the incident. The specific insurance business company is responsible in reviewing and if ever warranted, to pay-out on any claims being made which resulted from a certain incident that already took place throughout the coverage period, although such claim is being reported on a later date. Many insurance purchasers used the “claims-made policy”, for it provides security as well as protection, yet only and while such policy is made to be in force and those claims being made within that period of time.
In some studies, differentiation between occurrence based policies and claims based policies have been realized. Such that, liability insurance plans are considered as occurrence based or claims based. An occurrence based plan offers insurance coverage for a particular loss that has occurred within the period of the policy regardless of when a claim will be brought alongside with the insured. While claims based policy offers coverage on a claim which is brought during the period of the policy, regardless when the loss happened.
For example, if an individual had an “occurrence based policy, then the insurance can cover up if the mishap occurred on the dates, 30 July 2006 and 30 July 2007. It will not matter if one was not notified of the said accident in January year 2008; the insurance still covers the person.
On the other hand, if one chooses a claims-based plan, the insurance can cover up if he or she was notified of the happening and in turn notified the insurance company about the accident on 30 June 2006 and 30 June 2007. If said accident occurred on those dates and yet a person did not get a notice about it until 2008 of January, then the policy cannot cover such person.