Claims made vs occurrence insurance?

Claims made vs occurrence insurance?

• A. Occurrence = claims made during the policy period
• B. Claims made = claims made during policy period; Occurrence = occurs during policy period regardless of when the claim is made.
• C. Claims made = only for property claims
• D. There is no difference

Answer: (B)

The trigger for coverage is different between the two types of policy. In a claims-made policy, coverage turns on the claim being filed during the policy period, not on when the event happened. This means you must maintain the policy (or have tail coverage) to cover claims made during that window, even if the act occurred earlier. In an occurrence policy, the essential trigger is the occurrence of the event during the policy period. If the incident happens within that period, the claim can be filed later and still be covered under that policy, regardless of when the claim is actually made. This aligns with the statement that claims-made coverage requires the claim to be made during the policy period, while occurrence coverage requires the event to occur during the policy period. The other ideas—such as claims-made being limited to property claims or there being no difference between the types—don’t fit how these policies are designed to respond to claims.

The trigger for coverage is different between the two types of policy. In a claims-made policy, coverage turns on the claim being filed during the policy period, not on when the event happened. This means you must maintain the policy (or have tail coverage) to cover claims made during that window, even if the act occurred earlier. In an occurrence policy, the essential trigger is the occurrence of the event during the policy period. If the incident happens within that period, the claim can be filed later and still be covered under that policy, regardless of when the claim is actually made.

This aligns with the statement that claims-made coverage requires the claim to be made during the policy period, while occurrence coverage requires the event to occur during the policy period. The other ideas—such as claims-made being limited to property claims or there being no difference between the types—don’t fit how these policies are designed to respond to claims.