April 2017

Retroactive Date Explained

Reading through an insurance policy can often seem a formidable task. Laden with an involved and intricate lexicon of industry jargon, it is often difficult to decipher the important information. Amid a slew of limits and excesses, insuring clauses, and extensions, sit a series of important dates used to determine the period of coverage being offered. While the “Effective Date” and “Expiration Date” of a policy are easily recognised and understood as the dates on which the policy’s coverage begins and expires, respectively, the “Retroactive Date” is less well understood.

The retroactive date is a key term included in every liability policy written on a “claims-made” basis. A policy offering claims-made coverage will only cover claims that are reported during the policy period. Such a policy would not cover claims filed before or after the active policy period, regardless of when the loss occurred. Under a claims-made policy if the insured fails to immediately report a claim or circumstance that may give rise to a claim, they may forego their right to indemnity.

Read more