What is the main condition for a policy to cover losses according to the discovery rule?

The main condition for a policy to cover losses according to the discovery rule is that the policy must be in effect at the time of discovery. This rule states that coverage applies to losses that are discovered during the policy period, even if the events causing the loss occurred prior to the policy's inception. Therefore, for a claim to be valid under this rule, it is essential that the policy is active and provides coverage at the moment the insured becomes aware of the loss.

In contrast, the requirement for the policy to be renewed every year does not directly relate to the discovery of losses and is more about maintaining continuous coverage. Reporting the loss within a specific timeframe or having a minimum coverage limit might be relevant in certain contexts, but they do not define the core principle of the discovery rule, which centers on the timing of the policy's validity in relation to when the loss is identified.