Asbestos Hazard Emergency Response Act (AHERA) Certification Practice Exam

Under what conditions does an occurrence policy offer protection?

1. When the policyholder files a claim promptly

2. When an incident occurs while the policy is active

3. When claims are made in the same year

4. If the incident was foreseen

The correct answer is: When an incident occurs while the policy is active

An occurrence policy provides protection for incidents that happen during the period when the policy is active. This means that as long as the event or incident occurs while the policy is in force, the coverage applies, regardless of when the claim is made thereafter. This characteristic is fundamental to occurrence policies: they cover claims for incidents that arise from events that occurred during the coverage period even if the claim is filed later, possibly years after the event. For example, if a worker is exposed to asbestos during the effective period of the policy and later develops health issues related to that exposure, the occurrence policy will respond to the claim even if it is filed after the policy has expired. This principle provides a level of assurance for policyholders, knowing they are protected for past events as long as they occurred while the policy was in effect. The other options focus on different aspects that do not define the core functioning of an occurrence policy. Timeliness of filing claims, the timing of claims relative to the policy year, or whether an incident was anticipated do not influence whether the policy covers the incident within the specified active period.