The commencement of coverage is the point in time coverage starts and losses begin to be eligible for indemnity. It is usually tied to policy effective date terms and premium payment conditions.
Why timing matters
If a loss occurs before commencement, the insurer generally has no duty to pay unless specific pre-existing protections apply. The effective date can be delayed by unpaid first premium, condition precedents, or pending underwriting approvals.
Common disputes
The most frequent coverage questions involve whether coverage started at midnight, at invoice timestamp, or at policy issuance. Clear wording in the declarations and policy schedule prevents gap-of-coverage disputes.