Which statement about occurrence and claims-made liability forms and retroactive dates is true?

Which statement about occurrence and claims-made liability forms and retroactive dates is true?

• A. Occurrence policies require the claim to be reported during the policy period to trigger coverage.
• B. Claims-made policies require that a claim be made during the policy period, with no retroactive date possible.
• C. The retroactive date on a claims-made policy defines the earliest incident that can be covered, and incidents occurring before that date are not covered, even if a claim is filed later.
• D. All forms cover incidents regardless of date if a claim is filed within a year of policy expiration.

Answer: (C)

On a claims-made policy, coverage is tied to the claim being made during the policy period, and a retroactive date can be set to limit coverage to incidents that occurred after that date. The retroactive date acts as a cutoff: if the incident happened before that date, it isn’t covered even if the claim is filed later. This is why the statement is accurate. Occurrence policies are triggered by the date of the actual event, not by when a claim is filed, so requiring the claim to be reported during the policy period doesn’t apply to them. Many claims-made policies do include a retroactive date, so saying there’s no retroactive date isn’t correct. And coverage isn’t automatically extended to all incidents if a claim is filed within a year after expiration; tail coverage and policy terms vary, so that broad claim isn’t generally true.

On a claims-made policy, coverage is tied to the claim being made during the policy period, and a retroactive date can be set to limit coverage to incidents that occurred after that date. The retroactive date acts as a cutoff: if the incident happened before that date, it isn’t covered even if the claim is filed later. This is why the statement is accurate.

Occurrence policies are triggered by the date of the actual event, not by when a claim is filed, so requiring the claim to be reported during the policy period doesn’t apply to them. Many claims-made policies do include a retroactive date, so saying there’s no retroactive date isn’t correct. And coverage isn’t automatically extended to all incidents if a claim is filed within a year after expiration; tail coverage and policy terms vary, so that broad claim isn’t generally true.