Occurrence Policy in 2025: Essential Guide for Australian Businesses

Insurance isn’t just about ticking a box for compliance—it’s about safeguarding your business’s future. In 2025, occurrence policies are under the spotlight as Australia’s regulatory landscape evolves and business risks become more complex. But what exactly is an occurrence policy, and why are so many business owners taking a fresh look at this coverage model?

What is an Occurrence Policy?

An occurrence policy is a type of insurance that covers claims arising from incidents that happen during the policy period, regardless of when the claim is actually made. This means that if a covered event takes place while the policy is active—even if the claim is filed years later—you’re still protected. This is distinct from a claims-made policy, which only responds to claims lodged during the policy period.

• Example: If a slip-and-fall accident occurs at your café in 2023 while you hold an occurrence policy, but the customer doesn’t file a claim until 2025, your 2023 policy would still respond—even if you’ve since switched insurers.

2025 Regulatory Updates: Why Occurrence Policies Matter Now

This year, the Australian Prudential Regulation Authority (APRA) and the Australian Securities & Investments Commission (ASIC) have sharpened their focus on business insurance transparency and long-tail liability risks. Recent reforms encourage clearer disclosure around policy types and claims processes, especially for SMEs in retail, hospitality, and trades.

• Long-tail liabilities: Occurrence policies are particularly valuable for industries with risks that may not surface for years, such as construction, healthcare, and manufacturing.

• 2025 trend: More insurers are clarifying the distinction between occurrence and claims-made policies in Product Disclosure Statements (PDS), making it easier for businesses to choose the right cover.

• Regulatory push: New APRA guidelines require brokers and insurers to provide written confirmation of the policy type and its implications at renewal time.

For example, a Sydney-based construction firm faced a legal claim in 2025 for a defect in a building project completed in 2021. Because they had an occurrence policy in force at the time of the work, their insurer covered the claim—even though their current policy had switched to a new provider.

Occurrence vs. Claims-Made: The Real-World Impact

Understanding the difference between occurrence and claims-made policies can make or break your business’s risk management strategy:

• Occurrence Policy: Covers incidents that occur during the policy period, no matter when the claim is made.

• Claims-Made Policy: Only covers claims made while the policy is in effect, often requiring costly run-off coverage if you switch insurers or retire.

In 2025, rising litigation and increased awareness of historical liability risks mean more businesses are opting for occurrence-based products, especially in sectors like allied health, consulting, and trades. Brokers report that businesses appreciate the peace of mind that comes from knowing past work is still covered—even as staff or company structures change.

Who Should Consider an Occurrence Policy in 2025?

While not every business needs an occurrence policy, it’s a must-consider for:

• Construction and trades (e.g. builders, electricians, plumbers)

• Healthcare professionals (e.g. GPs, allied health practitioners)

• Consultants and advisors dealing with long-term projects

• Businesses with significant public liability exposures

With 2025’s focus on robust risk management and increasing regulatory scrutiny, reviewing your insurance arrangements is more important than ever. Be sure to check your Product Disclosure Statement and confirm whether your cover is occurrence-based or claims-made—this detail could make all the difference if a claim arises from work done years ago.

Conclusion

Occurrence policies offer enduring protection for Australian businesses, especially as legal risks become more complex and timeframes for claims stretch further. With 2025’s regulatory reforms and market trends, now is the perfect time to review your cover and ensure you’re protected for both today’s and yesterday’s work.