71. A customer was injured while using a product on January 27, 2020. The customer did not file a claim for this injury until March 29, 2023, after the manufacturer had gone out of business. Which type of Commercial General Liability (CGL) policy would provide coverage for this claim, based on its primary trigger?
Answer: A
An Occurrence-form CGL policy that was active on January 27, 2020.
An Occurrence-form CGL policy provides coverage for claims based on incidents that occur during the policy period, regardless of when the claim is filed. Since the injury occurred on January 27, 2020, and the policy was active at that time, it would cover the claim even though it was filed later.
A) An Occurrence-form CGL policy that was active on January 27, 2020.
This option is correct because an Occurrence-form CGL policy covers incidents that happen during the period the policy is in force. Since the injury occurred on January 27, 2020, and the policy was active at that time, the claim would be covered despite being filed years later.
B) Any CGL policy active at the time the business ceased operations.
This option is incorrect because coverage is not determined by the timing of the business's operations but rather by when the incident occurred. A policy that was active when the business ceased operations would not cover claims for incidents that happened prior to that time if it were not an Occurrence-form policy.
C) A Claims-made form CGL policy that was active on January 27, 2020.
This option is incorrect because a Claims-made form CGL policy only covers claims that are made during the policy period. Since the claim was filed in 2023, this type of policy would not provide coverage for an incident that occurred in 2020 unless it was still active and the claim was made during that period.
D) A Claims-made form CGL policy with an extended reporting period purchased after March 30, 2023.
This option is also incorrect. While an extended reporting period can allow claims to be reported after a policy has expired, it would not apply to an incident that occurred prior to the policy being active or that was not covered under a claims-made basis at the time of the incident.
Conclusion
The Occurrence-form CGL policy is the only option that adequately covers injuries arising from incidents that occurred during the policy period, which is critical in this case. All other options either misinterpret the timing of coverage or the nature of the claims-made policies, thus failing to provide the necessary protection for the injury that occurred.