Retroactive Dates in an Architects/Engineers Professional Liability Policy
There are many factors to understanding a retroactive date on a Professional Liability policy.
A retroactive date is defined as the date that your design firm has had a professional liability policy uninterrupted. Claims that arise from a project that is prior to this date will not be covered.
The retroactive date in a policy will vary with insurance companies. Some insurance companies have a retroactive date of full prior acts. Meaning you firm is covered from the time you have had a continual professional liability policy. Other insurance companies will name a specific date (3/1/2001). If a project was worked on prior to this date the claim would not be covered. A specific date may also reflect the start date of your firm.
If your firm changes insurance companies verify that the retroactive date is either the same with the new company or that they offer full prior acts. Occasionally a premium will be much lower than your current insurance company but it may mean that the retroactive date is the policy inception date, they would not cover any projects prior to the insurance they are offering.
Also, keep in mind that if you stop and start a professional liability policy this also restarts the retroactive date. This can become an issue if you had a project that was covered when you had a policy and now your firm doesn’t have a policy or has a retroactive date that does not cover the project.
When purchasing a Professional Liability policy make sure you know what your firm’s retroactive date is with that insurance company. If you have questions on retroactive dates on your design firms Professional Liability policy call or email your Professional Underwriters agent for assistance.