What is a retroactive date?

It is the date set in a policy that shows when you started a policy with a carrier and have continuous Professional Liability policies.  It eliminates coverage for claims produced by wrongful acts that took place prior to a specified date, even if the claim is first made during the policy period.

 

Why is it important to have a retroactive date?

A Professional Liability policy is a ‘claims made’ policy.  This means that when the claim is made you must have a policy in place at the time of the project and at the time of the claim.

 

What does full prior acts mean?

This ‘retroactive’ date means that the retroactive date is from when your firm was formed.  So the policy doesn’t name a specific date but gives a retroactive date to the beginning of your firm.

 

What if my firm switches carriers will my retroactive date remain the same?

It should, however, it is important that you and your agent verify with the new carrier that your retroactive date is the same as your current coverage or states that it is ‘full prior acts’.

 

If my firm cancels the Professional Liability policy will my firm lose the retroactive date?

Yes your firm will lose the retroactive date coverage, it is important that your firm keep a continuous policy in order to not lose the retroactive date.

 

If my firm is getting a brand new policy (not had a Professional Liability policy previously) what will be my retroactive date?

If your firm is getting a new Professional Liability policy the retroactive date of the policy will be the policy inception.  So even if your firm was started before the policy and project were completed prior to obtaining the policy, the retroactive date will be the policy inception.

 

Whenever in doubt of your retroactive date be sure to check with your agent and read your policy to ensure that it is accurate.