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full prior acts coverage

A type of claims-made liability policy that does not contain a retroactive date and therefore covers claims arising from acts that took place at any time prior to the inception date of the policy—regardless of how far in the past. For example, assume that an insured has a claims-made policy that includes a January 1, 2000, retroactive date and a January 1, 2014–15, term. If a claim is made against the insured on July 1, 2014, and the claim arose from a wrongful act that took place on January 1, 1998, there would be no coverage under the policy. This is because the wrongful act took place prior to the January 1, 2000, retroactive date. Now assume that another insured has a policy written with the same January 1, 2014–15, policy term, but the policy contains no retroactive date. If a claim were made against the insured on July 1, 2014, from a wrongful act that took place on January 1, 1998, coverage would apply because the absence of a retroactive date means that regardless of how far in the past a wrongful act giving rise to a claim took place, the claim will be covered (as long as it is made against the insured during the policy period). Full prior acts coverage is most likely to be granted when an applicant already has coverage in place at the time it submits an application. On the other hand, underwriters generally do not provide full prior acts coverage to insureds that have not previously purchased liability insurance. This is because underwriters sometimes believe that an applicant’s desire to buy coverage at this juncture may be motivated by the applicant’s intention to report a claim under the new policy. See also Claims-made coverage trigger; Prior acts coverage; Retroactive date.

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