What distinguishes occurrence policies from claims-made policies?

Occurrence policies are distinguished by the fact that they provide coverage for incidents that occur during the policy period, regardless of when a claim is made. This means that as long as the event leading to a claim happened while the occurrence policy was in effect, the insurer is liable to cover it, even if the claim is filed long after the policy has expired.

This characteristic is particularly beneficial for policyholders because it offers peace of mind knowing that as long as the incident occurs during their coverage timeframe, they're protected against any resultant claims down the line. This provides a layer of security for incidents that may not be immediately reported.

In contrast, claims-made policies only offer coverage for claims that are made during the policy period. If an incident occurs but the claim is filed after the policy has lapsed or is renewed under a different policy, there would be no coverage. Thus, option C appropriately captures the essence of how occurrence policies operate compared to claims-made policies.