Definitions for "Prior Acts Coverage"
A provision in certain claims-made insurance policies that specifies that acts as of a certain retroactive date will be covered.
Coverage for all acts that occurred before the policy was issued. Prior acts coverage is one of the means of covering the gap in coverage when switching from a claims-made policy to another claims-made policy or to an occurrence policy. The prior acts coverage is provided by the new policy, as opposed to tail coverage that is added by endorsement to an expired claims-made policy.
Most professional liability claims-made policies offer optional coverage for services performed prior to the effective date of the policy. This is called prior acts coverage. Prior acts coverage is typically extended to the effective date of a firm's first claims-made policy (when claims-made coverage has been maintained continuously) or to some date that your firm and the insurance company agree upon for pricing or underwriting reasons. The date established is called the prior acts date or retroactive date. Generally, the date remains the same with each subsequent renewal. If an act, error or omission happened before the prior acts date, it will not be eligible for coverage. With prior acts coverage, you can move your coverage from one insurance company to another without losing protection for covered services you performed in the past.