Which type of CGL policy is best for Craig's business to cover liability against unknown product defects?

An Occurrence Policy is particularly well-suited for businesses like Craig's that need coverage against liability for unknown product defects. This type of General Liability (CGL) policy provides coverage for incidents that occur during the policy period, regardless of when the claim is actually made. This is crucial for product liability, as defects may become apparent long after the product has been sold.

For example, if Craig’s product has an undiscovered defect that leads to a claim two years after the sale, an Occurrence Policy would cover the liability as long as the incident occurred while the policy was in effect. This feature ensures that businesses have protection against liabilities that may arise unexpectedly after the sale of a product.

In contrast, other types of policies would offer a different focus or limitations that might not align with Craig's needs for comprehensive yet long-term protection against potential product liability claims. Claims Made Policies, for instance, only cover claims that are reported during the policy period, which might leave gaps if a defect is identified after the coverage has lapsed. Likewise, Excess Liability Policies are designed to provide additional coverage above a certain limit of the primary insurance, but they do not address the fundamental need for direct coverage against the risks posed by product defects themselves. Specific Liability Policies might