Property damage or bodily injury is covered when it meets these three conditions:

• It is caused by an occurrence
• It is in the "coverage territory"
• It is during the "policy period"

Occurrence - Most liability insurance is written on what insurers call an occurrence basis. With this type of coverage, you are contractually obligated to notify the insurer as soon as you become aware that an event (the occurrence) has caused, or seems likely to result in, bodily injury, or property damage for which you may be legally liable. That insurer stays with the claim until it is resolved, however long that may be. Even if you later buy liability coverage from a different insurer, the insurer to whom you originally reported the occurrence stays with the claim.

Coverage Territory - Coverage territory is for the most part confined to the United States, including its territories and possessions, and Puerto Rico and Canada. It extends to international waters or airspace only when the travel is between destinations in the United States, including territories and possessions, and Puerto Rico and Canada.

There are three situations, however, when the coverage territory extends to injuries or damage anywhere in the world, so long as the lawsuit is brought in the United States, and it involves the following.

1.  Goods or products you made or sold in the United States, including its territories and possessions, and Puerto Rico and Canada.

2.  The activities of someone from your business in another part of the world who is away from his or her home in the United States, including its territories and possessions, and Puerto Rico or Canada only for a short time.

3.  Personal or advertising offenses facilitated through the Internet or similar electronic communications.

Policy Period - The policy period comprises the dates on which the coverage begins and ends. The standard form of liability policy covers only injuries and damages that you, or an authorized employee, come to know about within the policy period.  The policy covers personal and advertising injury only when the offense was committed during the policy period.

If there are further developments regarding a bodily injury or property damage that first becomes known to you and about which you give notice to your insurer during the policy period, that insurer continues on that claim beyond the policy period.

For example, Mae Hoover, a customer, sues you after she slips on ice in your parking lot and breaks a wrist. You turn the suit over to your insurer, ABC Insurance. A few months later, you change your liability policy to XYZ Insurance. A month after you go with XYZ, Mae amends her original lawsuit. She now contends that her wrist has not healed properly and seeks additional medical payments for the cost of surgery and higher damages for her lost income, expenses to her family because of her injury and for pain and suffering. Even though ABC is no longer your liability insurer, Mae's claim and the new developments continue to be handled by ABC, the insurer who handled the claim at the time it originally occurred.