The Crucial Role of Prior Acts Coverage in Insurance: Why It’s a Must-Have for Your Business
Prior Acts Coverage is an essential component of business insurance but is often overlooked or not fully understood. This coverage protects you from the claims made before your current policy’s Effective Date but after the Retroactive Date specified in your policy. Find out why it’s important to maintain it for your business.
Why Does Prior Acts Coverage Matter?
Prior Acts Coverage is a crucial form of coverage as it extends coverage to claims arising from events before your current policy’s Effective Date. To keep it simple, it allows businesses to be covered against incidents that may have happened in the past before your policy’s Effective Date, (after the Retroactive Date) but are reported during the current policy period. However, claims-made policies only cover incidents that occur between the Retroactive date & the Expiration Date.
What Happens If You Don’t Have It?
Imagine that you provided services to a client in 2019, but your current insurance policy’s Effective Date is in 2021. If a claim related to this service from 2019 arises or the “Claim” is “Made” in 2022, given that your current policy has Prior Acts Coverage with a Retroactive Date preceding the date of services in 2019, your current insurance policy would address this claim. However, if you do not have Prior Acts Coverage for this, your policy of 2022 would not cover this claim made on the 2019 incident. You would be seriously financially stressed and indebted trying to cover one hundred percent of the legal fees and indemnity payout costs for this claim. However, with Prior Acts Coverage and an appropriate Retroactive Date, you would instead be covered for this unexpected claim and have peace of mind to continue your operations efficiently.
Review it Regularly
It is important to review your policy for adequate coverage and thoroughly understand your Policy coverage, including the Retroactive Date. An expert insurance agent could efficiently guide you through it and ensure you don’t have a coverage gap!
Prior Acts Coverage is a vital element of effective risk management and a must-have for successful businesses. It ensures financial stability and protects your business from any unexpected past liabilities. Please consult an expert today and ensure your coverage is doing what you expect it to do. We are here to Protect You Better!
Call or Text us at 1 (877) PLIG-123
That’s 1 (877) 754-4123
