Claims-made vs occurrence policies in Singapore
The short difference
The trigger decides which year's policy pays. That matters most when a business changes insurer, changes limits or stops trading.
| Question | Claims-made | Occurrence |
|---|---|---|
| What triggers cover | A claim first made during the policy period | Injury or damage happening during the policy period |
| Which policy pays a 2030 claim for 2026 work | The policy in force in 2030 | The policy in force in 2026 |
| Past work | Covered back to the retroactive date | Covered if the event happened in a past policy year |
| After cancellation | No cover for new claims without run-off | Past years stay covered |
| Typical Singapore covers | PI, D&O, cyber, some product and environmental liability | Public liability, property, WICA, motor |
| Limit used | Current year's limit, at today's values | Limit of the year the event happened |
Neither trigger is better in general. Each fits a type of claim. Claims-made suits claims that surface years after the work. Occurrence suits accidents that are known when they happen.
What claims-made covers
A claims-made policy responds when two conditions are met. The claim is first made against the insured during the policy period. The act giving rise to it happened on or after the retroactive date.
The model fits professional and management liability because those claims arrive late. The Limitation Act 1959 gives 6 years to sue in contract or tort from when the cause of action accrues. Latent damage extends it. A negligent design in 2024 may cause no visible loss until 2029. An occurrence-based PI policy from 2024 would have to hold reserves for a decade. Claims-made lets the current insurer price today's claims at today's values.
Directors' liability follows the same pattern. Section 172 of the Companies Act 1967 allows a company to buy insurance for its officers against liability for negligence or breach of duty. D&O policies written under it are claims-made.
Claims-made policies also have a notification clause. The insured can report circumstances that may give rise to a claim. A later claim from a notified circumstance attaches to the year it was notified. The retroactive date guide covers the retroactive date in detail.
What occurrence covers
An occurrence policy responds to injury or damage that happens during the policy period. The claim can be made years later. The policy for the year of the event still pays.
Public liability is the main example. A visitor slips in a shop in March 2026 and sues in 2028. The 2026 public liability policy pays, even if the shop has changed insurer since.
Work injury compensation works on the same principle: the accident date governs. MOM raised the compensation limits for accidents from 1 November 2025. Medical expenses rose to S$53,000 or 1 year, from S$45,000. Death compensation rose to S$91,000 to S$269,000, from S$76,000 to S$225,000. An accident on 31 October 2025 is compensated at the old limits.
Property and motor policies follow the event too. The fire or the collision must happen during the policy period.
The weakness of occurrence cover is the limit. A 2026 limit must cover a claim settled in 2030 at 2030 costs. Inflation in medical and legal costs can erode it.
Where they overlap and where they leave gaps
The two triggers rarely overlap on the same claim. The gaps appear when the business changes something.
- Switching insurer on a claims-made policy. If the new insurer sets the retroactive date at the new policy's start, all past work is uninsured. The new policy should carry the original retroactive date.
- Stopping cover. When a firm closes, sells or retires, a claims-made policy ends with it. Claims made later have no policy. Run-off cover fills the gap.
- Moving from occurrence to claims-made. Some product and environmental liability covers can be written either way. A change to claims-made needs a retroactive date reaching back to the occurrence years.
- Late notification. A claims-made insured that knew of a circumstance and did not notify it may find both the old and new insurers decline.
- Low occurrence limits from old years. A claim from 2020 falls under the 2020 limit, which may now be too low.
Brokers face the same issue. Insurance brokers registered by MAS must meet professional indemnity requirements under the Insurance (Intermediaries) Regulations.
Which one a business needs
The business does not usually choose. The class of insurance sets the trigger. The choice is how to manage each.
Scenario 1: an architecture practice changing insurer. Its PI is claims-made. It needs the new policy to keep the original retroactive date. Every past project then stays covered for claims made in future years.
Scenario 2: a retail chain with public liability. Its public liability is occurrence-based. It should keep records of each year's policy and limit, because an old injury claim may fall under a policy that expired years ago.
Scenario 3: a consultancy closing after a sale. Its PI and D&O are claims-made. Claims can arrive for 6 years or more after the last project. It needs run-off cover for both, usually bought as a single premium at closure.
The practical rule: for claims-made covers, protect the retroactive date and buy run-off on exit. For occurrence covers, keep the old policies on file.
Frequently asked questions
Which Singapore covers are claims-made?
Professional indemnity, D&O, cyber and most management liability policies. Some product liability, environmental and medical malpractice policies are also claims-made. Public liability, property, motor and WICA respond to events in the period.
What happens to old work when I switch insurer?
On a claims-made policy, old work stays covered only if the new policy keeps the original retroactive date. If the new insurer resets the date, claims about past work are excluded. Confirm the retroactive date in writing before switching.
What is run-off cover and how long should it last?
Run-off cover responds to claims made after a business stops trading, for work done before. It should usually run for at least the 6-year limitation period. Latent damage claims can arrive later, so longer periods suit design and construction professions.
Is WICA occurrence-based?
Yes, in effect. WICA compensates accidents arising out of and in the course of employment. The accident date decides which policy and which compensation limits apply.
Sources
General information only, not advice on any particular policy. Cover depends on the policy wording and the insurer's terms.