Retroactive Date

On a claims-made policy, the retroactive date is the earliest incident date the policy will respond to. Anything that happened before it is excluded, no matter when the claim arrives. A retro date that reaches back to the start of your first continuous claims-made coverage is called a full prior acts or continuous retro date.

This is the quietest catastrophic defect in senior care insurance. When a program moves to a new market, the new carrier sometimes sets the retroactive date at inception rather than matching the prior one. Nothing looks wrong. The declarations page shows the same limit, and often a lower premium. What has actually happened is that every year of operations before that date is now uninsured, and in a class where a resident injury can surface as a lawsuit years later, that is a large uninsured tail. Compare the retro date on the new policy against the inception date of your first claims-made policy at every single renewal, and refuse a program that advances it without a deliberate decision and a funded tail.

Matching a prior retro date is usually available and is one of the most valuable things to negotiate, because it costs far less than the exposure it removes. Where a market will not match it, the alternative is buying tail coverage on the expiring program rather than accepting the gap.