Louisiana P&C Adjuster Practice Exam

What distinguishes a Claims-Made CGL form from an Occurrence CGL form?

1. The application process

2. The coverage limit

3. The coverage trigger

4. The renewal terms

The correct answer is: The coverage trigger

The key distinction between a Claims-Made Commercial General Liability (CGL) form and an Occurrence CGL form lies in the coverage trigger utilized for claims. In a Claims-Made CGL form, coverage is activated when a claim is actually made against the insured during the policy period, provided that the event leading to the claim occurred after the retroactive date noted in the policy. This means that if a claim is filed in the future, but the event occurred before the policy was in effect, coverage may not apply unless the incident happened after the retroactive date. Conversely, the Occurrence CGL form provides coverage for events that occur during the policy period, regardless of when the claim is made. As long as the incident took place while the policy was active, the insurer will cover claims filed in the future, even if they are submitted after the policy has expired. The other aspects, such as the application process, coverage limits, and renewal terms, do not fundamentally differentiate these two types of CGL forms. The crux of their distinction is about when coverage is triggered—hence, understanding the significance of the coverage trigger is vital for making informed decisions about insurance policies and managing risk.