North Carolina Adjuster Practice Exam

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

1. The coverage limits

2. The coverage trigger

3. The types of claims covered

4. The duration of coverage

The correct answer is: The coverage trigger

The primary distinction between a Claims-Made Commercial General Liability (CGL) form and an Occurrence CGL form lies in the coverage trigger. For a Claims-Made policy, coverage is triggered when a claim is made against the insured, as long as the incident occurred after the policy's retroactive date and before its expiration. This means that in order to be covered, the claim must be reported within the policy period, which places significant emphasis on the timing of when the claim is made. In contrast, an Occurrence CGL form is triggered by the occurrence of an event, regardless of when the claim is made. This means that as long as the event occurred during the policy period, the insured can file a claim afterwards and still be covered, even if the claim is made after the policy has expired. Understanding the coverage trigger is critical as it affects how and when claims can be made and subsequently covered under these two types of policies, making it a fundamental aspect when evaluating liability coverage options.