If you have Directors’ & Officers’ (D&O) Liability insurance, you might have spotted something called a ‘retroactive date’ or a ‘Pending and Prior (P&P) Litigation Date’ on your policy schedule. But what exactly are they? And what are the differences?
There’s no way around it; insurance is confusing. But don’t worry – we’re here to explain the ins and outs and make sure you’re suitably up to date on all the legal jargon and key terms.
What is a retroactive date?
A retroactive date usually refers to the date you first took out a specific type of insurance. For example, if you review your Professional Indemnity documentation, you’ll likely see the retroactive date corresponds to the same date you started that policy – whether it was last week or ten years ago.
Retroactive dates are more commonly seen on Professional Indemnity policies than on D&O insurance.
It’s current industry practice for new insurers to match the retroactive date on previous policies – so even if you’ve changed providers over the years, it shouldn’t be affected. That said, if you weren’t insured for a period, the date would generally reset to when you repurchased cover.
What is a Pending and Prior Litigation Date?
P&P Litigation Dates are more common on D&O policies. A P&P date means you’re not covered for any actions or litigation that you’re aware of or notified of before this date. In other words, when you’re taking out new cover or moving providers, the new policy isn’t designed to pick up existing claims or known matters. Rather, it’s for unforeseen future claims and litigation.
What’s the difference?
A retroactive date will likely exclude all actions before you take out the policy. Whereas a P&P date doesn’t specifically exclude any actions, providing you have no knowledge of a claim or circumstances that could result in a claim.
Guidance from RiskBox
We understand that insurance isn’t the easiest thing to wrap your head around, especially when it includes unknown jargon. That’s why we want to help. If you have a question about retroactive or P&P dates, our friendly team is willing to help.
Agencies - September 25, 2023
Blog - September 11, 2023