Georgia Property & Casualty Practice Exam

A claims-made policy is specifically designed to cover claims that are reported during the policy period. This means that if an incident occurs, the claim must be made while the policy is active for it to be covered. This type of policy is common in professional liability insurance, where the timing of the claim is crucial. The strength of a claims-made policy lies in its ability to protect insurers from claims made long after the event that triggered the claim, which would not be possible with other types of policies that cover incidents occurring within a specified timeframe, regardless of when the claim is made.

In essence, claims-made policies encourage policyholders to report incidents promptly, ensuring better claims management and fewer long-term liabilities for insurers. This is particularly important in fields where the timing of the claim can significantly impact the outcome and costs associated with a claim.

The other options describe aspects not applicable to claims-made policies, as they focus on different coverage structures. For example, a policy covering any claims made regardless of the period would not require claims to be reported within the active policy term, which is contrary to the defining feature of a claims-made policy.