What is an occurrence policy in the context of insurance?

An occurrence policy in insurance is designed to provide coverage for incidents that take place during the policy period, regardless of when the claims are reported. This means that even if an incident occurs while the policy is active, a claim may still be covered after the policy has expired, as long as the event occurred during the coverage term. This aspect distinguishes occurrence policies from other types of insurance, which may only cover claims made during the active period of the policy. In this case, option C accurately captures the essence of an occurrence policy by stating that it provides coverage while active and also continues to provide coverage once it expires for incidents that occurred during the policy period.

This feature makes occurrence policies particularly valuable for certain types of liability insurance, as it protects policyholders from claims arising from events that may not be reported until long after the policy has ended. Understanding this concept is critical for insurance professionals and policyholders alike to ensure adequate protection against potential liabilities.