CDPH Lead Inspector/Assessor California State Practice Exam

Which of the following insurance types typically covers claims made during the policy term?

1. Occurrence-based insurance

2. Claims made insurance

3. General liability insurance

4. Property insurance

The correct answer is: Claims made insurance

Claims-made insurance is designed to cover claims that are made during the policy period, regardless of when the incident causing the claim occurred. This type of policy requires the claim to be reported while the policy is active in order for coverage to apply. It is particularly common in professional liability insurance, where the incidents may arise long after the service was provided. In contrast, occurrence-based insurance covers claims based on when the incident took place, rather than when the claim is filed. This means that as long as the event occurred during the coverage period, the claim will be covered, even if it is reported after the policy has expired. General liability insurance is a broader category that can include both occurrence and claims-made policies, but it does not specifically define coverage based on the timing of the claim versus the incident. Similarly, property insurance typically covers physical damage to property rather than liability claims, and the terms of coverage would not focus on the timeline of claims made. Understanding these distinctions is crucial for risk management and ensuring appropriate coverage for different types of liabilities.