Prior Acts Coverage

Prior acts coverage is insurance which covers incidents which occurred under a previous policy which have not been reported. For instance, prior acts coverage will cover an incident that took place at any time prior to the inception date of the policy. Prior acts coverage can, however, have an established retroactive date, allowing for coverage to only cover acts which are committed on or after the retroactive date. Other prior acts coverage policies may allow for "full prior acts coverage" which does not have limitations or a retroactive date.

For example, assume that an insured doctor has a policy written with the policy term of January 1, 2010�11, but the policy contains no retroactive date. In this example if the doctor was sued on July 1, 2010, for a wrongful act that took place on February 2, 2008, coverage would apply because the policy did not have a retroactive date, and it does not matter how far in the past a wrongful act occurred as long as it is made against the insured during the policy period. Consider, however, many underwriters will not provide full prior acts coverage unless the applicant has been previously insured because the insurance company assumed they only purchased coverage because they intended to file a new claim under the new insurance plan.