Insurance Law Lesson 7: The Policy Period

Insurance policies are not forever. They have a start (called the “inception”) and an end (called “termination”). The time in between inception and termination is called the policy period.

The policy period usually begins and ends at 12:01 AM in the insured’s time zone.

If the triggering event of a claim (whether an “occurrence,” “offense,” or “claim made” – we’ll get to that later) happens before or after the policy period (or extended policy period), there is not going to be coverage.

Even if you have back-to-back insurance policies without a lapse, the period is still relevant.

-The policy terms may have changed from one year to the next.

-You may have switched insurance companies.

-You have a continuous event that could trigger multiple policies (thus multiplying the limits. This happens a lot in environmental pollution claims).

When the policy period passes, that should reset the aggregate policy limit because you will be working on a fresh policy.

If for no other reason, keep track of the policy period to make sure your policy doesn’t end without you knowing about it.

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