The claims-made basis raises a question it does not answer on its own: what becomes of a fault committed before the contract began. If the policy responds to claims received while it runs, and a letter arrives today about an error six years old, it must be said whether that error falls within the cover. The retroactive date is the clause that says so, and it takes the form of a date: faults before that date are excluded, faults after it are covered. One date, one line in the schedule, and often whole years of activity tipping to one side or the other.
Three drafting choices are met and they do not offer the same protection. Unlimited retroactive cover picks up every prior fault, however old, and is the most protective. A dated retroactive date fixes a year and excludes what precedes it. And the absence of retroactive cover, not always written as such, runs the cover from the contract's inception alone, which amounts to covering no prior fault at all: a professional practicing for twenty years is then insured only for its future errors.
The gap appears at a change of insurer, and one must see exactly where. The professional leaves a claims-made contract on December 31 and takes another on January 1. The old contract stops responding to claims received after its cancellation, since on a claims-made basis it is the date of the letter that counts. The new one responds only to faults after its retroactive date. If that date is set at its own inception, then every fault committed before that day is covered by nobody, even though the professional was insured without interruption for twenty years.
This is the most important point in the course and it deserves saying in the simplest terms: on a claims-made basis, continuity of contracts is not enough, continuity of retroactive dates is required. A professional able to line up twenty consecutive certificates of insurance, without a day's gap, may nonetheless have no cover for eighteen of those twenty years. Certificates almost never mention the retroactive date, which makes the check impossible from the documents usually shown.
One must then know what an insurer looks at before granting wide retroactive cover, since it explains refusals. Picking up the past means accepting losses arising from work one has not priced, done by teams one has not examined, at a time when the profession's practices may have differed. The insurer therefore asks for the claims history, the length of the activity, sometimes a questionnaire on files in hand, and it excludes almost systematically whatever the insured already knew about, which is the subject of a later lesson.
Two situations deserve particular attention because they produce gaps nobody looks for. The first is a change of activity: a professional extending its offering to a new service is covered for it from the contract that mentions it, and wide retroactive cover does not pick up an activity earlier contracts did not describe. The second is the acquisition of a practice or a portfolio: faults committed by the seller before the sale do not automatically follow, and a buyer believing it has bought a client base has sometimes also bought a liability without the matching cover.
The useful step therefore comes to a check taking five minutes that almost nobody performs. Ask not for the certificate but for the schedule, read the retroactive date in it, and compare it with the date the professional started practicing. If the two coincide, everything is covered. If the retroactive date is later, the interval between the two is a period of uninsured activity, and one must know what was done during that period before deciding whether the interval is acceptable. That comparison requires no legal skill, only looking at two dates instead of one.
An architectural practice has been in business since 2008. It has been insured without interruption: a first contract from 2008 to 2016, a second from 2017 to 2022, and a third since January 1, 2023. All three are claims-made. The first carried unlimited retroactive cover. The second a retroactive date of January 1, 2017. The third a retroactive date of January 1, 2020, the insurer having refused to go further in view of two claims notified in 2018. On May 4, 2026, a developer claims 780,000 euros for a design defect on a project delivered in 2015. The principal produces his eighteen consecutive certificates and considers the matter settled. What happens?
The eighteen consecutive certificates prove nothing of what the principal believes they prove, and that is the whole subject of the lesson: on a claims-made basis, continuity of contracts is not continuity of cover, only continuity of retroactive dates counts. Each of the three contracts must therefore be taken in turn with the letter of May 4, 2026 in hand. The first contract, 2008 to 2016, had unlimited retroactive cover and would have covered the 2015 fault without difficulty, but it is claims-made and it ended in 2016: it does not respond to a letter received ten years after its end, and its unlimited retroactive cover is of no use here since it looked backwards and not forwards. The second contract, 2017 to 2022, retroactive to January 1, 2017: the 2015 fault predates it, therefore excluded, and in any event it too ended before the claim. The third, in force when the letter arrived and therefore the only one whose claims-made trigger is satisfied, carries a retroactive date of January 1, 2020: the 2015 fault predates it by five years, therefore excluded. The result is that none of the three responds, and the practice bears the 780,000 euros alone although it never ceased to be insured. The gap was opened in two stages that should be distinguished, because they are not of the same nature. The first is structural and dates from 2017: moving from one claims-made contract to another with a retroactive date set at the new one's inception leaves everything before it outside, and nobody saw it because both policies were perfectly valid each on its own. The second is a deliberate refusal by the insurer in 2023, prompted by two claims from 2018, which pushed the retroactive date back from 2017 to 2020 and so deepened the gap by three further years. Two lessons for the future. The check that would have avoided all of it takes five minutes and consists in comparing the retroactive date, read in the schedule and not on the certificate, with the date business began, that is 2008. And where an insurer refuses wide retroactive cover, the refusal is not an underwriting formality: it is a decision leaving a period of activity uninsured, and it must be put to the principal as such.
- 01The retroactive date is a date: prior faults are out, later ones in, and that line tips whole years of activity one way or the other.
- 02On a claims-made basis, continuity of contracts is not enough: continuity of retroactive dates is required, and it is not the same thing.
- 03Twenty consecutive certificates can cover eighteen uninsured years, because a certificate almost never states the retroactive date.
- 04Wide retroactive cover does not pick up an activity earlier contracts never described, nor a seller's faults on the purchase of a practice.
- 05The check takes five minutes: compare the retroactive date, read in the schedule, with the date business began.