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Does Your Liability Policy Have the Right ‘Coverage Trigger’?

Posted by Shawn McCadden on Tue, Jan 08,2013 @ 06:00 AM

Tom Messier, Mason and Mason Insurance


Guest Blogger: Thomas Messier, CIC.  Tom is Vice President of Construction Industry Services at Mason and Mason Insurance Agency, Inc. in Whitman MA.  He speaks frequently to construction industry groups about insurance related topics. Tom is a Certified Insurance Counselor, and is a graduate of St. Michael’s College.


Does Your Construction Liability Insurance Policy Have the Right ‘Coverage Trigger’?

Roof Collapse


What Is An Insurance "Coverage Trigger"?

A “coverage trigger” is an event that causes your Liability policy to pay a claim. There are two basic types of “triggers”: occurrence and claims made.



What is an Occurrence Trigger?

An “occurrence” trigger means that the policy will cover any injury or damage during the policy period. For example, if a roof that you installed four years ago collapsed last week, injuring five people, the occurrence trigger will apply and the policy will pay. It doesn’t matter when the roof was built or when the claim was filed – only when the actual injury took place.

What is a Claims Made Trigger?

A “claims-made” trigger, as the name suggests, focuses on the date the actual claim is made. Underwriting and rating provisions might limit how far into your past the policy provides coverage. However, the key question is: “did the claim come in during the policy period?” If so, a “claims-made” Liability policy will pay. Using the example of the collapsing roof, it doesn’t matter when the roof was built or when the event took place, the trigger won’t apply until the claim is filed.

Construction Insurance ClaimIf this claim is made during the current policy period, your insurance company will pay it. However, suppose the claim isn’t made for several weeks, and by the time it arrives, your current coverage has expired and you’re into a new policy period? In this case, the “claims-made” policy will pay the claim, since it was made during the new period.

Maintaining Coverage Is Key

One type of trigger isn’t necessarily better than the other. However, it’s almost always wise to keep the current type in order to provide relatively seamless coverage.


Make Sure Your Insurance Agent Is Able To Offer The Right Advice

Questions to ask your insurance provider if your a contractor:

  • What is Claims Made Liability Insurance Coverage?
  • What is Occurrence Liability Insurance Coverage?
  • Which one is right for my business and why?

If you’re offered a Liability policy that offers broader coverage or more attractive pricing – but has a different trigger than your current insurance – consult with a construction insurance specialist before you make a decision. The only way to be sure you get the protection you need at a fair price is to consider all possible underwriting considerations and how the change in coverage trigger might affect your liability needs.

Watch for Tom's next guest blog where he'll discuss what a "Triple Trigger" is and why you should care about what it is.

Topics: Business Planning, Definitions, Insurance Considerations