Importance of Retroactive Date in Liability Insurance

One should understand the importance of retroactive dates in liability insurance since the date determines how far back in time, an incident occurred that could be covered by the liability insurance. Further, one must avoid gaps or lapses in insurance coverage. In order to obtain coverage, one must allocate the premium amount timely. In addition, the insurer must not stop paying the premium for the liability policy.

Read more
comprehensive

Get right expert advice

Hassle free policy

Speedy Claims

Top Insurers

Get ₹5 Crore insurance cover starting at ₹25,000/year+

Step 1/2

Get ₹5 crores insurance cover starting at ₹25,000+

secure-icon We don't spam
Get Updates on WhatsApp
By clicking on "" you agree to our Privacy Policy and Terms Of Use

Get ₹5 Crore insurance cover starting at ₹25,000/year+

Step 2/2
Get Updates on WhatsApp
Top Insurers
Expert advice

Buy right

Instant policy

Quick & Hassle free

Dedicated team

Speedy Claims

+Premium varies on the basis of Occupancy, Business Activity & Coverage Type

Maintenance of Retroactive Date

An insured, if deems fit, may update or switch the insurance policy if he believes that he may obtain more coverage at the same price he pays to his current insurer. Upon changing the insurer, he may still maintain the existing or the same retroactive date. However, he must clarify the same with the new insurer.

He may show his premium receipt to the insurer and request him to set the retroactive date at the earliest. It shall offer broad safety and save a significant corpus of the insured.

Let us understand this with an example.

An individual purchased D&O insurance on 1 April 2005. He continued paying a premium at the beginning of every financial year till 2007. Later he discovered that he may obtain the same coverage at a less price from the ABC insurer.

Hence, on 1 April 2008, he switched the insurer and opt the ABC insurer and pay the premium amount. He showed his premium receipt from the former insurer and requested him to set 1 April 2005 as the retroactive date.

Case Study

One may understand the importance of retroactive dates in liability insurance from the case law given below.

First Condo Group Ltd. v. Lloyd's Underwriters (2020)

It is a case of commercial general liability insurance that comes under the purview of professional negligence and deals with the exclusion of retroactive dates. It also expresses the importance of retroactive date in liability insurance.

An engineering firm purchased liability insurance and allocates the premium from March 2010 to March 2014. Later, it switched its insurer in September 2015. However, the policy included a provision that exclude coverage that occurred on or before 11 September 2015. Hence, 12 September 2015 became the retroactive date for claims of negligent acts, misrepresentation and error or omission.

On 30 October 2015, a victim was injured and suffered from a brain injury. The tragedy was caused to him due to the act of the insured who is covered under professional liability insurance. The victim instituted the lawsuit for negligence in Court.

The court passed the decree in favor of the victim and asked the defendant to pay the appropriate sum for the loss suffered by the victim. In this case, the insured approached the insurer and settled the claim.

Conclusion

One must understand the advantages and importance of retroactive dates in liability insurance before buying or switching the insurer. The retroactive date determines how far back the policyholder should be covered for the act that has occurred in past.

Written By: PolicyBazaar - Updated: 16 August 2023
Policybazaar for Business - Comprehensive Liability Insurance - Customer Reviews
View all
4/5
Based on 27 reviews
4
out of 5
Based on 27 reviews
1 users
15 users
11 users
0 users
0 users
4.3 April 09, 2023
Shubh
Competitive Premiums
The premiums offered by PolicyBazaar for the Comprehensive General Liability Insurance are competitive, considering the extensive coverage and top-notch customer service they provide.Truly recomend it.
Ludhiana
4.3 March 28, 2023
Prakhar
Worth Buying
PolicyBazaar worked closely with me to tailor the coverage to meet the specific needs of my business.Worth buying.
Dehradun
3.8 March 16, 2023
Veer
Wide Coverage
One of the most significant aspects of this insurance is its coverage. It provides extensive protection against a wide range of liabilities, including bodily injury, property damage, etc. Thanks for the policy PB
Lucknow
3.8 March 04, 2023
Akash
Peace Of Mind
I have been a satisfied customer of PolicyBazaar for several years now. It offers a comprehensive and reliable safety that has given me peace of mind and allowed me to focus on growing my business without constant worry about unforeseen events.Thankyou PB.
Bareilly
3.8 February 20, 2023
Ram
Claim Process Is Hassle Free
PolicyBazaar's claims process is efficient and hassle-free. In the unfortunate event of a claim, they handled everything swiftly and professionally, ensuring a smooth resolution without unnecessary delays. This reliability and promptness have further strengthened my trust in their services.Thankyou.
Delhi
4 February 20, 2023
Rohan
Great Customer Support
PolicyBazaar can help you get your Insurance as I am in the construction Industry and needed some guidance on risk concerns. I contacted PolicyBazaar Team, whO explaned to me the process to get the Insurance. Thank you PolicyBazaar.
Jamshedpur
3.8 February 16, 2023
Aditi
Damages Covered
I recently purchased CGL insurnace from PolicyBazaar. They helped me to cover my damages. Thankyou.
Jamshedpur
4 February 12, 2023
Neha
Helpful Team
We were looking to buy Comprehensive General Liability Insurance Plan that protects Third party property from any accidental damage at my workplace. So we landed on the PolicyBazaar website. It was well managed and described all the benfits in detaill... We contacted their Customer support and dcided to buy from them. Thanks, PolicyBazaar Team
Coimbatore
3.8 February 08, 2023
Veer
All In One Platform
It is an All in one platform which provided me unique perks, Low premium prices and a fast claim settlement process. Thankyou PB. Excellent platform.
Vadodara
4.3 February 04, 2023
Amar
Good Package
Got a really good coverage. Thanks, PolicyBazaar
Lucknow