What does occurrence insurance cover?

Occurrence insurance is designed to provide coverage for incidents that happen during the policy period, even if the claims are filed after the policy has expired. This type of insurance is important because it handles liabilities arising from events that may have long-term consequences. For example, if an incident occurs while a business is covered but the claim is filed years later, occurrence insurance will still protect the insured.

This coverage is beneficial because it gives peace of mind, knowing that the insured is protected for claims related to occurrences that took place during the effective period of the policy. This contrasts with claims-made policies, which only provide coverage if the claim is reported while the policy is active.

The other options reflect misconceptions about the nature of occurrence insurance. While property damage claims might be included in some specifics of occurrence coverage, it's not limited to them, making that option too narrow. Immediate risks following an incident pertains more to response liabilities rather than coverage, and the limitation to only incidents occurring while the policy is active does not recognize the claim filing that can happen after the coverage period, which is a key feature of occurrence insurance.