What does a "claims-made policy" cover?

A claims-made policy is designed to cover claims that are reported during the policy period, regardless of when the incident that led to the claim occurred. This type of insurance is particularly relevant in professions where claims can arise long after the work was completed, such as in medical or professional liability coverage.

The key feature of a claims-made policy is that it focuses on when the claim is made rather than when the event allegedly causing the loss occurred. As a result, if a claim is reported while the policy is in force, it will be covered even if the incident happened before the policy began, as long as it falls within the specified retroactive date that may apply.

This distinguishes it from other types of policies, which might only cover incidents occurring during the policy period or might not cover any claims after the policy has expired. Therefore, option B accurately reflects the nature of a claims-made policy, emphasizing its unique focus on claims being reported within the policy timeframe.