Coverage Trigger
A coverage trigger is an event that must occur in order for a liability policy to apply to a loss. Four different theories apply to coverage triggers: injury-in-fact, manifestation, exposure, and continuous trigger. **Injury-in-fact theory** says that the coverage trigger is the injury itself, so when the insured breaks his or her leg the liability insurance applies. It may take years for the injury to appear, but courts may consider the original period of the exposure (e.g. when the injured party was first exposed to the chemicals). **Continuous trigger** theory states that a combination of trigger types – manifestation, exposure, and injury-in-fact – leads to an injury that develops over time. **Manifestation trigger** theory says that the coverage trigger is the discovery of the injury or damage, so when the insured discovers that his or her vehicle is damaged the coverage applies. Under a continuous-injury trigger, each of these policies is said to provide coverage, since the injury occurred over a period of time in which multiple coverages overlapped.
What is a Coverage Trigger?
A coverage trigger is an event that must occur in order for a liability policy to apply to a loss. Coverage triggers are outlined in the policy language, and courts will use different legal theories pertaining to triggers to determine whether policy coverage applies.
How a Coverage Trigger Works
Insurance companies use coverage triggers to ensure that the policies they underwrite only apply when specific events occur. They do this to ensure that they only pay claims under certain circumstances, though this can shift the burden of proving that a policy should apply to the insured.
Because proving what triggers applied can be expensive or difficult, courts rely on legal theories to provide guidance. These theories apply to insurance cases involving different events. Four different theories apply to coverage triggers: injury-in-fact, manifestation, exposure, and continuous trigger.
Coverage Trigger Theories
Related terms:
Certificate of Insurance (COI)
A certificate of insurance (COI) is a non-negotiable document issued by an insurance company or broker verifying the existence of an insurance policy. read more
Claims-Made Policy
A claims-made policy is a type of insurance policy that provides coverage regardless of when a claim event took place. read more
Exposure Trigger
Exposure Trigger is an event that causes a policyholder’s insurance coverage to kick in. read more
Injury-In-Fact Trigger
Injury-in-fact trigger is a coverage trigger theory that states that policy coverage activates when an injury or damage actually occurs. read more
Insurance Underwriter
An insurance underwriter is a professional who evaluates the risks involved when insuring people or assets and establishes the pricing. read more
Liability Insurance
Liability insurance provides the insured party with protection against claims resulting from injuries and damage to people and/or property. read more
Manifestation Trigger
A manifestation trigger in an insurance policy activates coverage when the damage or injury is discovered rather than when it occurred. read more