Professional Indemnity Insurance – Why is an unlimited retroactive date so important for my cover?
All ‘claims made’ policies have a retroactive date on their policies, and it’s something very important to consider when purchasing professional indemnity insurance and other liability insurance policies.
Generally all insurance policies for professional indemnity, directors and officers, employers’ liability and statutory liability are underwritten on what is called a ‘claims made’ basis. This means that your insurance policy covers you for a period of time (usually for 12 months) in which a claim is made against you. The ‘trigger’ for cover relates to when a claim for compensation is made against you, not the time you did the act or provided the services which the claim relates to.
The retroactive date is the date from which point onwards your professional services are covered.
A claim could relate to work you did last week, last month, last year or even 5 years ago and this is where the retroactive date is really important. If you take out professional indemnity cover with a retroactive date the same as the start of the policy, then you will have no cover at all for any work you completed before that date. Or if for example your retroactive date is the 1st of January 2013 and you get a claim tomorrow for services you provided in December 2012, your policy will not cover you.
One of the most important benefits of cover through GSI Direct is that for all our ‘claims made’ policies, including professional indemnity insurance, our retroactive date is UNLIMITED! This mean all your previous work for the profession you have selected is covered. This is not common in the NZ insurance industry and a key benefit of our cover.
If nothing else, check your existing insurance policy to see what the retroactive date is.
For more information on give us a call on 0800 463 366 (0800 INDEMNITY).
Disclaimer: There are other factors and policy exclusions that may influence whether a claim is covered by a policy or not. Policy coverage will solely be determined by the policy documents and policy wording, and no reliance can be placed on the content of this blog post whatsoever. The content and examples of this blog post are only given to provide a general understanding or to help explain a specific concept.