Which statement best describes claims-made coverage?

Which statement best describes claims-made coverage?

• A. The insurer at the time of the act covers the loss.
• B. The insurer at the time of the claim covers the loss.
• C. The current policyholder covers all losses personally.
• D. Coverage is provided only if the claim is for a different incident.

Answer: (B)

In claims-made coverage, the key idea is that coverage is triggered by the claim being made, not by when the incident happened. The insurer that is in effect at the time the claim is filed is the one that provides coverage, as long as the policy is active and the claim is reported properly. This distinguishes it from an occurrence form, where events that happen during the policy period are covered regardless of when a claim is filed. So the best description is that the insurer at the time of the claim covers the loss. The other statements don’t fit because they either imply coverage based on when the incident occurred (instead of when the claim is made), or misstate who bears the loss or when coverage applies.

In claims-made coverage, the key idea is that coverage is triggered by the claim being made, not by when the incident happened. The insurer that is in effect at the time the claim is filed is the one that provides coverage, as long as the policy is active and the claim is reported properly. This distinguishes it from an occurrence form, where events that happen during the policy period are covered regardless of when a claim is filed.

So the best description is that the insurer at the time of the claim covers the loss. The other statements don’t fit because they either imply coverage based on when the incident occurred (instead of when the claim is made), or misstate who bears the loss or when coverage applies.