Idaho Property and Casualty Practice Exam 2025 - Free Practice Questions and Study Guide

A "claims-made" policy is designed to respond to claims made during the policy period, regardless of when the event that led to the claim occurred. This means that coverage is triggered solely by the act of the claim being reported to the insurer while the policy is in force.

This type of coverage is particularly common in professional liability insurance, where the liability can arise from events that may have taken place long before the actual claim is filed. The critical aspect of a claims-made policy is that the timing of the claim's filing determines whether coverage applies, rather than the timing of the incident that caused the claim.

For instance, if a professional makes an error in their services in 2020 but the claim isn't made until 2023, the policy would only cover that claim if the claims-made policy was active at the time the claim was reported in 2023. Thus, the focus is on the moment the claim is communicated to the insurer, aligning perfectly with the provided answer.