Texas All Lines Adjuster Practice Test

What distinguishes a Claims-Made Form from other liability policies?

1. It covers claims filed after the policy period ends

2. It covers only incidents occurring during the policy period

3. It allows for unlimited claims without time constraints

4. It excludes personal injuries from coverage

The correct answer is: It covers only incidents occurring during the policy period

The distinction of a Claims-Made Form lies in its specific coverage parameters, particularly regarding the timing of incidents and when claims can be filed. A Claims-Made Form provides coverage for incidents that occur during the policy period, but it also requires that the claim be made within that same period or during an extended reporting period if a claim is made after the policy has expired. This means that the policy will respond to claims only if the event that caused the claim happened while the policy was in effect, hence the significance of the policy period in relation to claims. This differs from other types of liability policies, such as Occurrence policies, which provide coverage for incidents that happen during the policy period regardless of when the claim is filed, even if that is after the policy has ended. Therefore, the key feature of a Claims-Made Form is its requirement that a claim be made within the specific timeframe established by the policy, which emphasizes the connection to the policy period for coverage to be activated.