What does claims made coverage include?

Claims made coverage specifically pertains to liability insurance policies that respond to claims or lawsuits only if the incident leading to the claim occurred during the policy period and the claim is reported while the policy is in effect. This means that if a claim is made for an event that took place while the policy was active, the insurer is obligated to provide coverage, provided the claim is reported within the appropriate time frame after the incident.

This type of coverage is distinct because it emphasizes the importance of the timing of both the event and the claim itself. The policy will not cover claims for incidents that happened before the policy term began, which is a critical aspect of how claims made coverage functions.

In contrast, options related to claims filed at any time, claims made after the policy expires, or coverage for incidents from previous years do not accurately reflect the constraints and guidelines associated with claims made policies. Thus, claims made coverage is fundamentally linked to the policy period, making the correct choice clear.