Retroactive Cover (Rückwärtsdeckung)

Concept

Retroactive cover is a refinement of the claims-made principle in professional indemnity and financial loss liability insurance: whereas a pure claims-made policy only covers claims first made during the policy period, retroactive cover additionally extends protection to breaches of duty committed before the start of the current policy – but after a contractually agreed retroactive date – provided the resulting claim is first made during the current policy period.

Relevance on changing insurer or occupation

Retroactive cover is particularly relevant when changing insurer or taking up a newly regulated activity: without a sufficiently far-reaching retroactive date, a coverage gap would arise for breaches of duty from before the current policy whose delayed consequences only materialise into a claim later. It is thus the mirror image of extended reporting period cover (Nachhaftung), which addresses the opposite case – claims first made after the end of the policy for earlier breaches of duty.

Relevance for insurance practice

For professionals with a practice built up over many years (doctors, lawyers, tax advisers, architects, insurance brokers), seamlessly linking the retroactive date and extended reporting cover across successive insurers or policy changes is essential to ensure continuous cover without temporal gaps; intermediaries should expressly check and document the retroactive date at every change of insurer or policy.