Asbestos Hazard Emergency Response Act (AHERA) Certification Practice Exam

When does a claims-made insurance policy provide coverage?

1. If a claim is made after the policy expires

2. If a claim is made while the policy is active

3. Regardless of the claim timing

4. If the claim is potentially valid

The correct answer is: If a claim is made while the policy is active

A claims-made insurance policy provides coverage specifically when a claim is made during the time that the policy is active. This means that for a claim to be eligible for coverage, both the event leading to the claim and the reporting of that claim must occur while the policy is in force. This aspect differentiates claims-made policies from occurrence policies, which cover incidents that occur during the policy's term, regardless of when the claim is filed. By understanding this, it becomes clear that claims-made policies are structured to protect against claims that are reported as a consequence of events occurring while the coverage was active. Therefore, if a claim is made after the policy has expired, it would not be covered, highlighting the significance of the timing in relation to policy activation.