What does "claims-made" coverage imply?

"Claims-made" coverage is designed so that the insurance policy will only cover claims that are reported during the active policy period, regardless of when the incident that caused the claim actually occurred. This means that if a policyholder is insured under a claims-made policy, they must report any claims to the insurer while the policy is in force, for those claims to be eligible for coverage.

This type of coverage is particularly important for professionals or organizations that may face claims arising from services provided in the past. It emphasizes the necessity of timely reporting within the period the policy is in effect. This differs from other types of coverage, such as occurrence policies, which cover claims related to incidents that occurred during the coverage period, even if the claim is filed after the policy has expired, as long as the incident occurred while the policy was active.

The other options do not accurately describe the essence of claims-made coverage. For instance, claims do not need to be filed within a specific time frame other than while the policy is active, and it does not extend to past incidents beyond what is reported during the policy duration.