Prior Insurance

What Does Prior Insurance Mean?

Prior insurance is a type of policy that provides coverage for incidents that occurred before the policy was issued. It is primarily applicable to liabilities that arose in the past but are only addressed legally after the policyholder has purchased the policy.

Insuranceopedia Explains Prior Insurance

Most liability insurance only covers incidents that occur during the policy period, excluding any risks that arise before or after that timeframe. Many policies also specify a retroactive date, which limits coverage to events occurring after a certain point in the past. For example, if you purchase liability insurance in December 2016, the policy might cover incidents dating back to December 2012. However, if you are held liable for an event that occurred in November 2012, the policy would not provide coverage. General liability insurance for businesses usually works this way, and only responds to events that took place inside the active policy period.

Prior acts coverage, however, does not include a retroactive date. This means it covers any past actions for which you may be held liable, regardless of when they occurred. This is one reason prior acts wording matters most to buyers of claims-made policies like professional liability insurance, where a complaint can arrive years after the work that prompted it.