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retroactive date

What is a retroactive date?

by constructaquote - 17 September 2019


From accountants and architects to real estate agents and hairdressers, if you’re on the hunt for professional indemnity insurance – in a bid to protect your business and your clients – the odds are that sooner or later on your quotation journey you’ll be asked for a ‘retroactive date’. So what exactly is it?

If you’re an accountant, for example, and you’ve been working with clients for the last six years and you’ve had professional indemnity insurance for the entire period of six years (with no gaps), you’ll be covered by your insurer should claims arise. The retroactive date in this instance would be the date your policy began six years ago.

In other words, a retroactive date is the date you bought a professional indemnity policy.

The whole purpose of this date is it allows insurers to exclude claims that may come about from any work you may have done prior to this date.

Using the above example, you do need to be aware that if you have not had uninterrupted professional indemnity cover during the six years, and a claim has come up in recent days, it’s unlikely your insurance company will cover you and you’ll only be covered from the date your new policy begins.

At the end of the day, one of the key questions business owners need to ask themselves is if the worst were to happen could you afford to keep running your business and pay solicitor and court fees if an unhappy client sued you for negligence? If the answer is no, then you many want to consider professional indemnity cover as a form of protection.

Disclaimer: The advice provided here are our own interpretations and opinions. We have tried to simplify the main points to create this article and the information provided is for general informational purposes only. While we try to keep the information up-to-date and correct, there are no representations or warranties, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the information, products, services, or related graphics contained in this blog for any purpose. Any use of this information is at your own risk.