Continuity date
A date set in a claims-made policy before which known facts or pending litigation are excluded, which preserves continuity of cover for a loyal insured and can be lost when changing insurers.
A policy triggered by the claim normally excludes claims arising from facts known to the insured before inception, or from proceedings already under way. For an insured renewing each year with the same insurer, applying that exclusion at every renewal would create gaps: a fact discovered during one year, not yet notified as a circumstance, would be excluded at the next renewal as a known fact. The continuity date solves this by fixing once and for all the date against which prior knowledge and pending litigation are assessed, generally the date of the first policy bought without interruption. As long as cover is continuous, the date stays the same. It has real commercial value, because it is often lost when changing insurers: the new insurer sets a continuity date at its own inception, unless negotiated. The broker moving a directors' or professional liability program must therefore secure recognition of the continuity date, or the insured trades a lower premium for narrower cover.
A company insured without interruption since 2015 changes insurer in 2026 for a premium 20 percent lower, without negotiating recognition of its continuity date. In 2027, an action concerns 2025 facts its directors were vaguely aware of: the new insurer excludes it as prior, whereas the old one would have covered it.
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