Retroactive Period

What Does Retroactive Period Mean?

A retroactive period refers to the time during which an insurance company does not provide coverage for claims. It encompasses any period prior to a policy’s retroactive date—the date from which the policy begins covering legitimate claims. Retroactive periods typically apply to claims-made policies, which are common for professional liability insurance sold to doctors, lawyers, accountants, and other service providers.

Insuranceopedia Explains Retroactive Period

The retroactive period exists to prevent insurance companies from covering claims for events that occurred long before the policy was in effect, even if the claims are filed during the policy period. For instance, a property insurance policyholder cannot receive coverage for damage that occurred in 2010 if the policy’s retroactive date is 2016. Even if the claim is filed after 2016, it will not be covered because the event causing the damage occurred during the retroactive period. The same logic applies to claims-made general liability insurance for businesses, where the retroactive date determines how far back the policy will reach when a claim is filed.