Professional indemnity insurance is generally written on a claims-made basis. This means the policy in force when a claim is first made will usually be the starting point for determining whether cover is available.
However, the date on which the professional work was undertaken also matters. A retroactive date sets the earliest point from which the policy will cover past professional services.
If the act, error or omission occurred before that date, the resulting claim will generally not be covered—even if the claim itself is made during the current policy period.
If a policy has the following dates:
A claim made in June 2026 relating to advice provided in March 2021 may be covered because the advice was given after the retroactive date.
A claim made at the same time relating to advice provided in November 2019 would generally fall outside the policy because the work was undertaken before the retroactive date.
Cover remains subject to the other terms, conditions and exclusions in the policy.
Allegations of professional negligence may emerge many years after the work was completed. An error might only become apparent when a project fails, a transaction is reviewed or a client suffers a financial loss.
Maintaining historic retroactive protection is therefore essential. Under a typical claims-made PI policy, a claim may only be covered if:
PI schedules use several terms to describe retroactive cover.
“Retroactive date: none” or “Retroactive date: full prior acts”
These terms generally mean that the policy does not impose a specific retroactive-date restriction.
Subject to the identity of the insured and the remaining policy terms, cover may extend to professional work undertaken since the business was established. This will usually provide the broadest protection for historic work.
“Retroactive date: Inception”
This generally means that only work undertaken on or after the inception of the policy is covered.
It may be appropriate for a new venture, but for a business with an established trading history, it could leave earlier work uninsured.
“Retroactive date: [specified date]”
The policy may show a particular date, such as 1 January 2019. Professional services undertaken on or after that date may be covered, while earlier work will generally fall outside the policy.
The date might reflect when the business was established or when it first purchased continuous PI insurance.
“Retroactive date: As expiry”
This usually means that the proposed insurer intends to provide the same retroactive cover as the expiring policy.
The existing date should still be confirmed and recorded. “As expiry” should not be accepted without checking the date shown on the expiring schedule.
Particular care is needed when moving a client between insurers or reviewing renewal quotations.
The retroactive date on the proposed policy should be compared with the expiring schedule. A later date may substantially reduce the client’s cover, even where the premium, limit and other headline terms appear favourable.
Clients should also be advised to retain previous schedules and evidence of continuous cover. These records may be important if the extent of the historic cover later needs to be established.
A retroactive date determines how far back a claims-made PI policy will respond to professional work.
It is not enough for the claim to be made during the policy period. The underlying act, error or omission must also fall within the retroactive cover provided.
Preserving the client’s historic cover can be just as important as maintaining the limit of indemnity. The retroactive date should therefore be checked at every renewal and whenever cover moves to a new insurer.
See more of our Professional Indemnity Insurance: A Practical Guide for Brokers