When you're buying a professional indemnity insurance policy, one of the most important terms to look out for is the retroactive date. Many people tend to overlook this clause, but it can decide whether or not you're covered for older claims. This blog will walk you through what a retroactive date professional indemnity means and why it's crucial in protecting your professional past.
What is a retroactive date?
The retroactive date is the date from which your professional indemnity insurance policy starts covering you for claims. Even if your policy begins today, the retroactive date could be in the past, which means claims from before today can be considered as long as they occurred after that retroactive date.
If the incident happened before the insurance retroactive date, your insurer may not honour the claim.
Example of professional indemnity insurance retroactive date
Let’s say you're an architect and bought a professional indemnity insurance policy on 1st January 2024 with a professional indemnity retroactive date of 1st January 2020.
Now consider the following:
- You completed a project in June 2020.
- A structural flaw was noticed in that building in March 2025.
- You file a claim under your policy in April 2025.
Since the project was completed after the retroactive date (1st Jan 2020) and the claim was reported during your policy period, your insurer is likely to accept the claim.
On the other hand:
- If your retroactive date was 1st January 2022 instead, the above claim would probably be rejected.
- That’s because the incident occurred before the insurance retroactive date, even though the claim was filed later.
Key things to keep in mind:
- Always ensure your retroactive date goes back far enough to cover your earlier professional activities.
Conclusion
The retroactive date in a professional indemnity policy plays a crucial role in deciding whether your past professional work is covered. It’s especially important in fields like architecture, consulting, healthcare and legal services, where claims might come years later.
So, if you're buying a new professional indemnity insurance policy or renewing one, check the retroactive date professional indemnity clause carefully. It could be the difference between a covered claim and a rejected one. A little attention now can save you from big financial troubles later.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It is advised to verify the currency and relevance of the data and information before taking any major steps. Please read the sales brochure / policy wordings carefully for detailed information about on risk factors, terms, conditions and exclusions. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.