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Retroactive date

On a claims-made policy, the date from which triggering events are covered. Anything earlier is excluded.

Definition

Law no. 2003-706 of August 1, 2003, Article L. 124-5 of the French Insurance Code: claims-made cover is recognized in law, with a subsequent-claims period of at least five years after termination for earlier events. On a claims-made policy, the retroactive date sets the point from which an event giving rise to liability can be covered. Anything before it is excluded, even if the claim itself comes in during the policy period. Claims-made cover keys on the date of the claim rather than the date of the event; the retroactive date limits how far back the insurer will go. Picking the date, and keeping it continuous, matters most when the insured switches carriers. The new policy needs a retroactive date old enough to pick up past events that haven't been claimed yet. Set it too recent and those events fall into a gap in cover, the classic orphan claim that no policy will take. In professional liability and in cyber, where the fallout from an event can surface late, you always check this date.

Its 4 cross-references, woven across the glossary's 18 categories
Retroactive date: Insurance glossary illustration, AlgoPolis
Example

Textbook case: a company switches insurers and, without noticing, accepts a new policy whose retroactive date is the inception date. A defect committed a year earlier is claimed afterward. Neither the old policy nor the new one covers it.

Read next
InsuranceClaims-made and occurrence basisTwo ways of triggering a liability cover, depending on whether the policy keys off the date of the harmful event or the date the victim makes the claim.Read the entry →InsuranceExtended reporting periodAn extension of the period during which claims can be reported after a claims-made contract expires, for events that predate it.Read the entry →InsuranceIBNR claims (Incurred But Not Reported)Reserve for claims that have occurred by the valuation date but have not yet been reported; in broad market usage it also covers future deterioration of claims already known.Read the entry →
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