Question

A type of liability insurance that covers the insured for any claims arising form an incident that occurred, or is alleged to have occurred, during the time the policy is in force regardless of when the claim is made.

a. true
b. false

Answer 1

The statement is true as it describes 'occurrence-based' insurance coverage, where events within the policy period are covered even if the claim is later.

Step-by-step explanation:

Insurance is a method of protecting a person from financial loss, in which policy holders make regular payments to an insurance entity. These entities are willing to reimburse the insured when they suffer substantial financial harm from an event covered by the policy.

However, this description matches the concept of an 'occurrence-based' policy, which indeed covers incidents that happen during the policy period, even if the claim is filed after the policy ends. Therefore, the statement provided in the question is true.