What does claims made wording refer to in the context of liability insurance?

Claims made wording in the context of liability insurance specifies that coverage is applicable only when claims are made against the insured during the active policy period. This means that as long as the policy is in force, any claims brought forth must occur during this timeframe for the insurer to be liable.

This presents a clear boundary for both the insured and the insurer, as it defines when coverage begins and ends—specifically, it emphasizes that the event leading to a claim must be reported within the duration of the policy for it to be valid. This structure aids in risk management for insurers, allowing them to assess and contain their liabilities within specific periods.

In contrast, other options do not align with the fundamental concept of claims made wording. The assertion that all prior claim events are covered regardless of occurrence misrepresents the limitation that aligns with claims made policies; these policies do not support coverage for incidents that took place before the current policy period. Similarly, limiting coverage to claims above a certain amount does not accurately reflect the characteristic of claims made wording, which does not inherently set thresholds for claims. Lastly, the suggestion of coverage only for future incidents misleads, as claims made policies do not extend to incidents occurring after the policy term without the claims being made during the