Loss Sustained coverage includes what condition?

• A. Cover only losses that both occurred and were discovered during the policy period, or within one year of expiration.
• B. Cover losses only if they occurred during the policy period.
• C. Cover losses only if discovered within 30 days after expiration.
• D. Cover losses regardless of occurrence if discovered within 2 years.

Answer: (A)

Loss sustained coverage looks at both when the loss happened and when it’s discovered. It pays for losses that occur during the policy period and are discovered either during that period or within a defined discovery window after the policy ends (often one year). The correct statement reflects this by saying losses must occur during the policy period and be discovered during the policy period, or discovered within one year after expiration. This matches the idea of a post-expiration discovery period that still provides coverage for events that happened while the policy was in force. The other options either ignore the discovery window, set an unrealistically short discovery period, or waive the occurrence timing entirely, which isn’t consistent with loss sustained coverage.