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⚡ '''Occurrence trigger''' is the legal and contractual mechanism that activates [[Definition:Insurance policy | insurance coverage]] based on when the injurious event — the [[Definition:Occurrence (insurance) | occurrence]] — takes place, rather than when the [[Definition:Claim | claim]] is made or when the [[Definition:Insured | insured]] first becomes aware of a potential loss. It is the default coverage trigger in most [[Definition:Occurrence-based policy | occurrence-based]] [[Definition:General liability insurance | general liability]] and [[Definition:Property insurance | property]] policies, and courts have developed several variations of it — including the "injury-in-fact" trigger and the "continuous trigger" — to handle complex scenarios where harm unfolds over extended periods, such as [[Definition:Environmental liability | environmental contamination]] or [[Definition:Asbestos liability | asbestos exposure]].

🔄 The trigger determines which [[Definition:Policy period | policy period]] responds to a loss, and in straightforward cases, this is simple: a slip-and-fall on March 15 triggers the policy in force on that date. Complexity arises when damage occurs gradually or is discovered long after it began. Courts in different jurisdictions have adopted competing trigger theories — the exposure trigger, the manifestation trigger, and the continuous trigger — each allocating coverage across policy years differently. For [[Definition:Underwriter | underwriters]] and [[Definition:Claims adjuster | claims adjusters]], understanding which trigger theory governs a given jurisdiction is critical when evaluating [[Definition:Long-tail liability | long-tail claims]] and determining how [[Definition:Policy limits | limits]] and [[Definition:Deductible | deductibles]] apply across multiple policy years.

📈 The occurrence trigger's importance radiates through [[Definition:Reserving | reserving]], [[Definition:Reinsurance | reinsurance]] structuring, and [[Definition:Actuarial analysis | actuarial modeling]]. Because an occurrence trigger can pull in policies written decades ago, insurers must maintain [[Definition:Incurred but not reported (IBNR) | IBNR reserves]] for latent exposures that may not manifest for years. [[Definition:Reinsurer | Reinsurers]] price their treaties with careful attention to trigger language, since a continuous trigger theory can spread a single loss across many policy years — potentially piercing multiple [[Definition:Excess of loss reinsurance | excess of loss]] layers. For [[Definition:Broker | brokers]] advising clients with potential long-tail exposures, articulating how the occurrence trigger works — and how it contrasts with a [[Definition:Claims-made trigger | claims-made trigger]] — is essential to placing coverage that genuinely protects the insured.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Occurrence (insurance)]]
* [[Definition:Claims-made trigger]]
* [[Definition:Continuous trigger]]
* [[Definition:Manifestation trigger]]
* [[Definition:Long-tail liability]]
* [[Definition:Occurrence-based policy]]
{{Div col end}}

Definition:Occurrence trigger - Revision history

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