Property and Casualty Insurance Practice Exam

What defines an occurrence in insurance terminology?

1. Any single claim filed by an insured

2. An event of loss that includes repeated exposures to harmful conditions

3. A one-time accident resulting in a claim

4. An unforeseen event of minimal loss

The correct answer is: An event of loss that includes repeated exposures to harmful conditions

The definition of an occurrence in insurance terminology is based primarily on the concept of an event that leads to loss or damage and signifies a broader understanding than just a single incident. Specifically, an occurrence is characterized as an event of loss that often includes repeated exposures to harmful conditions. This allows for several instances of exposure leading to a claim under a single policy, highlighting the importance of understanding ongoing risks that can accumulate over time. In contrast, while a single claim may be associated with an occurrence, it does not encompass the entire scope of potential events contributing to that claim, which underscores why it is not the best choice. A one-time accident could be considered a part of an occurrence, but defining an occurrence merely as a one-time event limits its applicability to various scenarios where harm may not be immediately apparent. Lastly, an unforeseen event of minimal loss does not capture the broader implications tied to occurrences, as it suggests a narrow focus on loss amount rather than the event’s nature or potential for repeat exposure. Hence, the comprehensive definition provided in choice B captures the essence of what an occurrence means in the context of insurance.