Which statement correctly describes occurrence and claims-made professional liability policies and tail coverage?

Which statement correctly describes occurrence and claims-made professional liability policies and tail coverage?

• A. Occurrence coverage only covers events claimed during the policy period.
• B. Claims-made coverage covers events occurring during any time.
• C. Tail coverage has no role in policy termination.
• D. Occurrence coverage covers events during the policy period regardless of when claimed.

Answer: (D)

The main idea is how these policies are triggered. In an occurrence policy, coverage is driven by the date the incident happened, not by when a claim is filed. If the incident occurred during the policy period, the claim will be covered even if the claim is filed after the policy ends. That’s why the statement is correct: occurrence coverage covers events during the policy period regardless of when the claim is made. For context, a claims-made policy is triggered by the act of filing the claim and typically requires continuous coverage or a tail (extended reporting period) to cover claims filed after termination for incidents that happened during the policy period. Tail coverage plays a role precisely to extend reporting rights after policy termination. The other options are off because occurrence is not limited to claims filed during the period, claims-made isn’t about events occurring at any time without regard to when the claim is made, and tail coverage is indeed relevant after termination to capture late-reported claims.

The main idea is how these policies are triggered. In an occurrence policy, coverage is driven by the date the incident happened, not by when a claim is filed. If the incident occurred during the policy period, the claim will be covered even if the claim is filed after the policy ends. That’s why the statement is correct: occurrence coverage covers events during the policy period regardless of when the claim is made.

For context, a claims-made policy is triggered by the act of filing the claim and typically requires continuous coverage or a tail (extended reporting period) to cover claims filed after termination for incidents that happened during the policy period. Tail coverage plays a role precisely to extend reporting rights after policy termination.

The other options are off because occurrence is not limited to claims filed during the period, claims-made isn’t about events occurring at any time without regard to when the claim is made, and tail coverage is indeed relevant after termination to capture late-reported claims.