West Virginia Property and Casualty Licensing Practice Exam

If a claims made CGL policy is written without a retroactive date, what does that imply about coverage?

1. It covers only claims that occurred during the policy period

2. It will cover claims reported during the policy period regardless of occurrence date

3. It excludes coverage for any claims occurring prior to the policy inception

4. It provides unlimited coverage for all claims

The correct answer is: It will cover claims reported during the policy period regardless of occurrence date

When a claims-made Commercial General Liability (CGL) policy is written without a retroactive date, it signifies that the policy will cover claims reported during the policy period irrespective of when the underlying event that caused the claim occurred. This means that even if the incident took place before the policy was initiated, as long as the claim is reported while the policy is active, it will be covered. This is substantial because it broadens the scope of coverage for the insured, providing added protection against potential claims related to prior incidents that may not have been anticipated at the time the policy was initiated. Policies with a retroactive date would typically limit coverage to events occurring on or after that specified date; thus, the absence of such a date ensures inclusion of a wider range of prior events.