Question

Insured, formerly under Occurrence policies, has Claims Made CGL. Effective on 1/1/00.Retroactive date, 1/1/00. Renews 1/1/01, 1/1/02, 1/1/03, 1/1/04 - retrodate remains 1/1/00 in all renewals. During 2004 he is told that he will be held liable for an incident that occurred at his plant. If the incident occurred in 1999, which of the following best describes his situation?

a. He has no coverage at all for the 1999 loss
b. Current policy pays loss
c. 1999 policy covers loss as long as it happened in 1999 - no matter how much later claim is brought, as 99 policy was an Occurrence policy.
d. He would be covered if the 1999 policy had supplemental extending reporting period endorsement.

Answer 1

A Claims Made CGL policy typically does not cover incidents before the retroactive date; however, if the insured had a supplemental extending reporting period endorsement on their 1999 policy, they might be covered for the incident in 1999.

Step-by-step explanation:

The student's question pertains to whether a Claims Made Commercial General Liability (CGL) policy would provide coverage for an incident that took place before the retroactive date specified in the policy. In this case, the insured's policy has a retroactive date of 1/1/00, and the policy was renewed annually without changing this date. If the incident occurred in 1999, normally the claim would not be covered under the Claims Made policy since it occurred before the retroactive date.

However, the student's scenario includes a possible solution involving a supplemental extending reporting period endorsement. This endorsement can typically be added to a Claims Made policy and allows the insured to report claims for incidents that occurred before the retroactive date and after the inception of their original policy. If the insured had such an endorsement on their 1999 policy, it would permit them to report the claim during the extended reporting period, thus potentially providing coverage for the 1999 incident.