What Is an Occurrence Policy and How Does It Differ From Claims Made for a Medical Device Company?

An occurrence policy responds to a claim when the event giving rise to it happened during the policy period, regardless of when the claim is filed. A claims-made policy responds when the claim is filed during the policy period, regardless of when the event happened (so long as the event occurred after the retroactive date). The distinction sounds technical and it is, but for a medical device company whose products remain in the field for years after manufacture, the choice shapes the long-tail exposure profoundly, and the version most founders default to without thinking is rarely the right one for every line on the program.

The Two Triggers in Plain Form

An occurrence policy attaches to the year of the event. If a device implanted in 2018 causes alleged harm in 2026, the responsive policy is the 2018 policy. Occurrence is what most medical device products liability is written on, precisely because the field life of a device extends well past the policy period in which it was sold.

A claims-made policy attaches to the year the claim is reported, provided the event occurred after the retroactive date. The same 2018 event brought as a 2026 claim would route to the 2026 claims-made policy, assuming the retroactive date reaches back. Claims-made is the dominant trigger for professional liability, errors and omissions, D&O, and employment practices, where claims usually arise from past acts discovered later.

The names sometimes obscure the mechanism. Occurrence attaches to the event. Claims made attaches to the report. Both can answer the same claim under different rules, and a device program usually contains both.

Why It Matters for a Device Company Specifically

A medical device is not a service consumed and gone. It sits in a patient, in a hospital, or in a clinic for years, sometimes decades. State statutes of repose for product liability vary from ten years to indefinite, and the discovery rule extends the practical window further. The expensive claim arriving in 2026 may attach to a unit sold in 2014, and the responsive policy on an occurrence basis is the 2014 policy. The company needs continuous coverage with no gaps across that entire field life, because any gap creates an uninsured period for events that occurred during it.

That is why products liability for devices is almost always occurrence-based. A claims-made products line would require the company to maintain coverage for as long as any unit might generate a claim, a structural commitment the earliest products would keep extending. The full structural picture is mapped in products liability for medical device manufacturers.

Where Claims-Made Is the Right Trigger

The picture flips for the lines that respond to the company’s own professional conduct. D&O, errors and omissions, employment practices, and management liability are written on a claims-made basis because the typical claim arises out of an act the company performed at some past point and the claim is filed later. The retroactive date is the gating wording: it defines how far back the policy reaches for prior acts. A retroactive date set too late, or reset on a carrier change without preserving prior acts, lops off coverage for the prior period.

The end-of-life question for a claims-made line is tail coverage, the run-off endorsement that keeps the policy responsive for a defined period after it ends. The acquisition dynamic for a device company is detailed in tail coverage for a medical device company, and the same logic applies on every claims-made line the company carries.

What This Means at Placement

Three points decide the practical answer. Products liability should almost always be occurrence-based, sized to maintain continuous coverage across the field life of the earliest units sold. D&O, E&O, employment practices, and most management liability should be claims-made with the retroactive date preserved at every placement or carrier change. Cyber is increasingly claims-made with first-party coverage triggered by discovery, and the policy form should be read directly on its trigger rather than assumed.

The companion question is how the lines coordinate with each other. A claim that mixes professional services and a product (a clinical decision-support feature that is part of a device, for example) can trigger both an occurrence products line and a claims-made E&O line, and the wording on each has to be read against the other. The Tech E&O versus products boundary is mapped in the seam between Tech E&O and products liability for SaMD, and the trigger question is part of that seam.

What to Do Now

Pull each line on the program and confirm the trigger basis (occurrence or claims-made), the retroactive date if claims-made, and how the line interacts with the others on a mixed claim. The product life of your earliest units sets the floor for the products liability tail, and the prior-acts position on each claims-made line is the work to maintain at every renewal and every carrier change.

The trigger question is one of the most consequential structural decisions on a device company’s program, and the choice the company defaulted into at first placement is rarely the choice it would make today. A specialty review through Tower Street Insurance can map a device company’s triggers across every line and confirm whether the structure protects the field life of the products as it actually exists.