Retroactive dates and claims-made cover explained

This is the single most misunderstood feature of professional indemnity insurance, and the one that causes the most uninsured losses. Understanding it takes ten minutes and can save a business.

Claims-made, not claims-occurring

Most business insurance works on a “claims-occurring” basis: the policy in force when the incident happened responds, even if you claim years later. Professional indemnity does not work that way. PI is claims-made: the policy that responds is the one in force on the day the claim is made against you — or the day you become aware of a circumstance that might give rise to one.

The consequence is stark. Advice you gave in 2021 that produces a claim in 2026 is dealt with by your 2026 policy. If you have no policy in 2026, there is nothing to respond — even though you were properly insured when you did the work.

What a retroactive date actually means

Since the current policy handles claims about past work, insurers limit how far back they’ll reach. That boundary is the retroactive date. Work carried out before it is excluded, full stop.

Ideally your retroactive date is the day you started trading — often shown as “unlimited” or “none” — meaning every piece of work you have ever done is within scope. A retroactive date of “inception” means only work done since this policy started is covered, which for an established firm leaves years of exposure completely uninsured.

The switching trap

Here is how firms get hurt. You’ve held PI for eight years with insurer A, retroactive date unlimited. You move to insurer B for a cheaper premium, and B sets the retroactive date at inception — today. Insurer A’s policy has expired, so it won’t handle new claims. Insurer B won’t look at anything before today. Eight years of completed work is now uninsured, and you almost certainly didn’t notice, because the certificate still says “£1m professional indemnity”.

When you change insurer, the retroactive date must be carried across at least as far back as your original. This is a routine request and most insurers will honour it — but only if someone asks. It is the first thing a competent broker checks on any PI move, and the first thing an online purchase won’t do for you.

Continuity of cover and the notification duty

Claims-made cover carries an obligation that catches people out: you must notify your insurer of circumstances that might lead to a claim, not just formal claims. A client emails saying they’re unhappy with your report and are “considering their position” — that is a notifiable circumstance, and it should go to your insurer promptly, even though no claim has been made.

Notify it during the policy year and the claim is locked into that policy, even if the formal claim arrives three years later. Sit on it, renew, and then report it, and both insurers can decline — the old one because it wasn’t notified in time, the new one because you knew about it before inception. Late notification is one of the most common reasons genuine PI claims go unpaid.

What to check on your schedule today

• Is there a retroactive date, and does it go back to when you started trading?
• Does it match or predate the retroactive date on your previous policy?
• Is there a prior known circumstances exclusion, and have you notified everything you’re aware of?
• If you’ve changed the services you offer, does the activity definition still describe what you actually do — including past work?
• If you stop trading, what happens? See our run-off cover guide.

Why this needs a human

Retroactive dates don’t appear in price comparisons. Two quotes showing “£1m PI” can differ by a decade of protection. Premier Insurance has arranged professional indemnity since 1983 — when we move a client between insurers we carry the retroactive date across and check the notification position before anything is signed. Send us your current schedule and we’ll tell you what you’re actually covered for.

Related professional-indemnity insurance guides

• How much does professional indemnity insurance cost in the UK?
• What limit of indemnity do I actually need?
• Professional indemnity vs public liability: what's the difference?
• Do I need run-off cover when I close or sell my business?
• Professional indemnity for consultants and contractors

Speak to a UK insurance broker

Premier Insurance has been arranging UK professional-indemnity insurance since 1983. We are FCA regulated, BIBA members, and place cover with 200+ insurers including Lloyd's of London. Call 020 8908 2426, WhatsApp 07728 305383, or email hello@premier-insurance.co.uk. See our professional-indemnity Insurance page for full cover details.