What is the Discovery provision in a liability policy primarily used for?

The Discovery provision in a liability policy is primarily used for reporting future incidents that may not have been known or occurred at the time the policy was originally taken out. This provision allows insured individuals or entities to report claims after the policy period has expired, as long as the incident was discovered during the policy term. This is crucial for providing ongoing protection and ensuring that any unknown incidents that arise in the future can still be addressed under the coverage of the policy.

By enabling insured parties to report situations that they may not have been aware of during the active policy period, the Discovery provision helps to ensure continuity and safeguarding against unforeseen claims. This element is particularly important in liability policies, where circumstances leading to claims can surface well after the initial event has occurred.

Other choices are related to different aspects of liability coverage, such as defense costs, which deal specifically with the expenses of defending against claims, or supplementary payments, which refer to additional reimbursements provided by the insurer. However, the primary function of the Discovery provision centers on the ability to report and address new claims that arise from previously unknown events.