CDPH Lead Inspector/Assessor California State Practice Exam

What do claims made insurance policies cover?

1. Claims made any time

2. Claims made during the policy term

3. Claims made regardless of policy period

4. Future claims regardless of previous incidents

The correct answer is: Claims made during the policy term

Claims-made insurance policies specifically provide coverage for claims that are made during the active policy period. This type of insurance emphasizes the importance of the timing of the claim being reported, as opposed to when the incident that led to the claim occurred. Under a claims-made policy, if a claim arises from an event that took place before the policy was enacted but is made while the policy is still active, it would be covered, provided the incident falls within the terms of the policy. This creates a focus on the reporting aspect, giving insured parties peace of mind that as long as they report a claim during the policy's term, they will have coverage for that claim, subject to the policy conditions. In contrast, options that suggest covering claims made any time or regardless of the policy period misrepresent the core function of claims-made policies, which tie coverage to the moment of claim recognition rather than the occurrence of the event itself. Future claims pertaining to past events that are outside the coverage period would typically not be covered under a claims-made policy unless specific provisions or extensions are outlined in the insurance contract.