Texas General Lines — Property and CasualtyCommercial LinesMedium
A small manufacturing business has a Commercial General Liability (CGL) policy with a Claims-Made Coverage Form. The policy period is January 1, 2023, to January 1, 2024. The retroactive date is January 1, 2020. A claim is made against the business on March 15, 2024, for an injury that occurred on December 1, 2023. The business did not purchase an Extended Reporting Period (ERP). Is this claim covered?
- ANo, because the claim was made after the policy period ended and no ERP was purchased.
- BYes, because the injury occurred after the retroactive date.
- CNo, because all Claims-Made policies require an ERP for any claims made after the policy period.
- DYes, because the injury occurred within the policy period.
Show answer & explanationAnswer & explanation
Correct answer: A. No, because the claim was made after the policy period ended and no ERP was purchased.
In a Claims-Made policy, both the injury/damage must occur on or after the retroactive date AND the claim must be reported within the policy period or during an Extended Reporting Period (ERP). Since no ERP was purchased and the claim was made after the policy period, it is not covered.
Why the other options are wrong
- B. The retroactive date condition is met, but the claim reporting condition is not.
- C. An ERP is only required if a claim is made after the policy period; it's not universally required for all claims made after the policy period to be covered.
- D. While the injury occurred within the policy period, the claim was made after the policy expired and without an ERP.
CGL Claims-Made Coverage
A type of Commercial General Liability policy where coverage is triggered when a claim is first made against the insured during the policy period or during an Extended Reporting Period (ERP), provided the injury or damage occurred on or after the retroactive date.
- Claim must be made (reported) during policy period or ERP.
- Injury/damage must occur on or after the retroactive date.
- Retroactive date limits how far back occurrences are covered.
Memory trick: Report Right, or Retroactive's Rejection.