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retroactive date

A retroactive date is a provision found in many (although not all) claims-made policies that eliminates coverage for claims produced by wrongful acts that took place prior to a specified date, even if the claim is first made during the policy period.

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For example, a January 1, 2020, retroactive date in a policy written with a January 1, 2020-2021, term, would bar coverage for claims resulting from wrongful acts that took place prior to January 1, 2020, even if claims (resulting from such acts) are made against the insured during the January 1, 2020-2021, policy period. There are two purposes of retroactive dates: (1) to eliminate coverage for situations or incidents known to insureds that have the potential to give rise to claims in the future and (2) to preclude coverage for "stale" claims that arise from events far in the past, even if such events are unknown to the insured. In the former case, the retroactive date preserves the principle of "fortuity"—that is, the insurer should not be called on to cover the so-called burning building. In the latter instance, the retroactive date makes policies more affordable by precluding coverage for events that, while insurable, are remote in time.


retro date

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