One of the most important distinctions in liability insurance is whether a policy is written on a claims-made or occurrence-based form. This difference determines when coverage applies—and for businesses and property owners facing environmental liabilities, it can decide between a covered claim and an uncovered loss.
An occurrence-based policy is critical for funding the environmental remediation of old pollution.
Historical general liability insurance policies—specifically Commercial General Liability (CGL) occurrence policies issued before 1986 and General Liability (GL) policies issued before the 1970s can fund the cleanup of old contamination because virtually all of these policies are occurrence-based and not claims-made.
These legacy policies were widely available, rarely had deductibles, and most importantly, did not contain the standard pollution exclusions in policies issued today. Insurance archaeologists focus on recovering these older CGL policies because coverage is available in the present day to fund the remediation of contamination that occurred 50+ years ago. Even if the business has closed, the property has changed hands, or the claim has recently been discovered and is being tendered.
This article will explain the key differences between claims-made and occurrence-based insurance policies, outline the applications, benefits, and limitations of each, and show how this distinction plays a critical role in obtaining coverage for environmental cleanups.
What Is General Liability Insurance?
General liability insurance protects policyholders from financial loss associated with third-party claims due to bodily injury, property damage (such as environmental liability), or personal injury (libel or slander). For industries with long-tail contamination risks, these CGL policies can cover legal fees, remediation costs, and settlements tied to hazardous waste exposure (personal injury), or historical site contamination (property damage).
For property owners such as: businesses, cities, counties, universities, utility districts, and governmental agencies that own properties with a history of manufacturing, industrial, or commercial uses, general liability policies are crucial in funding environmental cleanup efforts years or even decades after operations cease. Identifying these historical policies is key to securing coverage from your insurance company for costly remediation projects.
What Is an Occurrence-Based Policy?
An occurrence-based insurance policy provides coverage based on when an incident occurred, regardless of when the claim is filed. If the event that caused damage or injury happened while the policy was active, the insurance carrier remains responsible, even if it takes years or decades to report claims.
In the context of environmental liability, these pre-1986 Commercial General Liability (CGL) policies are extremely valuable. This is because they generally did not include a pollution exclusion, and because they are occurrence-based policies, they are uniquely capable of covering contamination, hazardous waste, and other environmental claims that happened decades earlier.
And this is why present-day businesses, government entities, and property owners can pursue insurance-funded remediation—even when decades have passed since the policy was issued.
Advantages of Occurrence-Based Policies
Finding an occurrence-based CGL insurance policy has distinct advantages for funding historical remediations. These policies, purchased 50+ years ago, offer long-term protection and financial stability, present day and into the future.
| Key Benefits of Occurrence Policies |
| ✔ Long-Term Protection (Legacy CGL Policies): Even if a business has closed or the property has been sold, older occurrence policies can still cover contamination that happened during the policy period. |
| ✔ Ideal for Long-Tail Liabilities: Pre-1986 policies without pollution exclusions are critical for industries facing environmental contamination, industrial waste, and hazardous material exposure. |
| ✔ Not Dependent on Renewals: Occurrence policies don’t require ongoing renewals to remain valid for coverage against past occurrences.. |
| ✔ Predictable Coverage: If contamination occurred while the historical CGL policy was insuring the property, there may be coverage, even if the claim is just now being realized. Many states have case law on this subject matter that can be relied upon by legal counsel to make reasonable opinions for coverage. |
| ✔ Policies Survive: There are numerous strategies to bring these policies back from the brink of extinction and provide funding for environmental remediations, such as: Zombie corporations and Assignment of Claims. |
| ✔ More Attractive to Buyers & Investors: Finding these historical CGL policies and making them available to a Buyer & Investor will add tremendous value to the property or business. This is because these occurrence-based policies may provide coverage today and into the future for historical liabilities. |
What Is a Claims-Made Policy?
A claims-made policy only provides coverage if the claim is filed and reported during the policy period. If coverage lapses or tail coverage (extended reporting period) isn’t purchased, the insurer will not pay, and this is the most significant distinction from occurrence-based policies.
The policyholder must tender claims during the policy period under claims-made policies.
For businesses managing everyday liability risks, claims-made coverage may be appropriate. However, claims-made policies are rarely helpful in addressing long-tail liabilities like historical contamination.
Today, claims-made policies are more commonly used in industries where liabilities are expected to emerge quickly after services are rendered, such as:
- Professional services (lawyers, accountants, architects)
- Financial institutions with regulatory or fiduciary risks
- Healthcare providers facing malpractice exposures
- Technology and cybersecurity firms
- Environmental consulting firms that offer assessments but not direct remediation
- Underground Storage Tank (UST) Insurance
Benefits of Present-Day Claims-Made Policies such as Pollution Liability & UST Policies
While claims-made policies offer lower upfront costs and flexibility, they also have limitations and cannot be used to fund the cleanup of historical contamination. Claims-made pollution liability & UST policies serve many industries successfully, and are necessary to provide coverage for environmental liabilities that may occur in the present day and to be in compliance with Federal and State regulations.
How Each Policy Type Applies in Different Environmental Remediation Scenarios
The table below illustrates how claims-made and occurrence-based policies apply to environmental remediation claims across different industries. These examples highlight why businesses with long-term contamination risks benefit more from occurrence-based policies, while claims-made policies are helpful for businesses engaged in ongoing remediation work, as long as they maintain continuous coverage.
| Business Type | Scenario | Pre-1986 Occurrence-Based CGL Policy | Present Day Claims-Made Pollution Liability & UST Policies |
| Gas Station | A gas station discovers a fuel leak from underground tanks installed in 1965. A lawsuit is filed in 2025 when the site is redeveloped and pollution is discovered. | Covered – The CGL policies active from 1965 to 1985 (before the Absolute Pollution Exclusion) may still provide coverage today. | Not covered – The UST policy would only provide coverage if the pollution happened during the policy period and up to the retroactive date. |
| Dry Cleaners | A dry cleaner operated from 1970 to 2010. In 2023, a buyer sues the prior owner over historical soil contamination. | Covered – The CGL policies purchased by the business owner and the property owner from 1970 to 1985 would be a viable resource to provide coverage. | Not covered – Historical insurance is not covered under Pollution Liability policies. |
| Bulk Plant Facility | A bulk plant stored and distributed gasoline, diesel, and jet fuel. In 2024, the state ordered the business owners to clean up contamination stemming from the business’s operations in the 1970s and 1980s.. | Covered – Pre-1986 CGL policies are still enforceable for pollution claims tied to incidents during that time. | Not covered – UST policies would not apply for 50+ year old contamination. |
| Bus Barn | A bus barn shut down in 2015. In 2026, former workers sued the school district for asbestos exposure in the 1980s while maintaining the fleet. | Covered – Occurrence-based CGL policies from the 1980s would provide insurance coverage to defend the school district from these claims associated with bodily injury. | Not covered – UST and Pollution Liability policies exclude bodily injury claims that occurred in the 1980s. |
These examples show how historical CGL occurrence-based policies provide long-term coverage for past contamination, making it ideal for businesses and property owners with historical environmental risks. In contrast, claims-made coverage is more limited in how they can be used. UST and Pollution Liability policies typically only fund environmental remediation if the triggering event happens while the policy is in place.
Why This Matters for Insurance Archaeology
For businesses facing historical liabilities—especially those related to environmental contamination, hazardous waste, or industrial pollution—the distinction between claims-made and occurrence-based policies can be the difference between financial protection and an uncovered claim.
Many environmental and industrial claims surface decades after the initial contamination occurred. If historical CGL policies are in place at the time of contamination, there may be coverage today, even if the business has since closed or changed ownership.
We’re Here to Help You Uncover Historical Occurrence Coverage
Understanding the difference between claims-made and occurrence-based policies is essential for businesses managing liability risks, especially those dealing with environmental contamination, industrial operations, and long-tail liabilities.
The right insurance policy could mean the difference between covered cleanup costs and costly out-of-pocket expenses for businesses facing historical contamination or legacy environmental risks. If you’re unsure whether past policies still provide coverage, Restorical Research specializes in uncovering historical insurance records that could help fund your environmental remediation efforts.
Restorical Research helps businesses, property owners, and attorneys identify and recover historical general liability insurance policies that may still cover environmental and industrial claims. Contact us today to discuss how we can help uncover the insurance protection you need.
