In a liability policy, what does "occurrence" typically mean?

In the context of a liability policy, "occurrence" refers to an event that results in loss or damage. This definition captures the essence of what triggers coverage under the policy. Liability insurance is designed to protect businesses from claims resulting from injury or damage that they may inadvertently cause to third parties. Therefore, the term "occurrence" is crucial because it defines the specific events that can lead to claims being filed against the business.

Understanding this concept is essential in the field of commercial insurance, as it helps policyholders identify the situations that may result in a loss and thus require coverage. While a claim made against the business is a result of an occurrence, it is not synonymous with the event itself; rather, it is a response to that event. Similarly, a combination of circumstances affecting the business may influence risk but does not define a singular event that leads to liability. Lastly, the completion of a contract is unrelated to occurrences in terms of liability insurance, as it pertains to fulfillment of contractual obligations rather than incidents causing damage or injury.