Which type of insurance covers losses discovered during the policy period or within one year of its termination?

The correct answer is the Loss Sustained form. This type of insurance is designed to cover losses that are discovered during the policy period or within a specified time frame after the policy has ended, typically within one year. This means that any loss that occurred during the time when the policy was active, even if it wasn't discovered until after the policy ended, is still eligible for coverage, as long as it is reported within that one-year timeframe.

This is particularly important in industries where claims may take time to surface, allowing policyholders to have peace of mind knowing they are still covered for incidents that may take a while to be identified. This feature emphasizes the importance of not only when the loss occurred, but also when it is discovered and reported, which is a critical distinction in managing risk and ensuring financial protection.

In contrast, the Loss Incurred option doesn’t focus on the timing of loss discovery after policy termination, and the Lost Time form generally pertains to different aspects of coverage related to business interruption and work stoppages rather than the discovery of losses. Continuous coverage form typically deals with maintaining uninterrupted coverage rather than specifically addressing the timing of when losses can be reported, making Loss Sustained the fitting choice.