What are coverage triggers in insurance?

Coverage triggers in insurance refer to the specific events or circumstances that activate or initiate the insurance coverage for a claim. This is crucial in determining whether a policy will respond to a given loss or damage.

For example, in a liability insurance policy, the coverage trigger might be the occurrence of an accident that results in bodily injury or property damage during the policy period. If such an event occurs, the insurer is obligated to cover the damages according to the terms outlined in the policy.

Understanding coverage triggers is essential for both insurers and insured parties, as it delineates when coverage applies, helping policyholders understand when they can seek compensation for losses. This concept enables insurance professionals to evaluate claims accurately based on the timing and circumstances surrounding the incident.