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Prior acts coverage

Prior acts coverage is insurance protection for incidents that happened before you bought your existing claims-made insurance policy.

What is prior acts coverage?

Prior acts coverage protects you from mistakes you made while insured under a previous claims-made insurance policy. It is sometimes called nose coverage.

Prior acts coverage is included in claims-made liability insurance policies, including errors and omissions, professional liability, and directors and officers insurance. It covers you back to your policy’s retroactive date, which is the oldest date from which you have maintained continuous insurance.

View video transcript.

As a small business owner, you know it’s important to understand how your insurance policy works.

A claims-made policy provides benefits only if you file a claim after the policy start date. If you cancel your policy and then report a claim, it will not be covered.

In this case, if you had a $1 million claims-made policy and are sued for $1 million in your first year, you’d no longer have coverage. That is, unless you increase your policy limit in the second year.

Occurrence-based and claims-made policies are often found in specific types of insurance coverage.

For example, claims-made policies will often be found in your directors and officers coverage and your professional liability insurance, which is also referred to as errors and omissions insurance.

If you’re just starting out, you may want a lower cost claims-made policy.

Get the right coverage for your small business with Insureon today. Click the link to get started.

How is prior acts coverage different from full prior acts coverage?

Prior acts coverage protects you back to your retroactive date. Full prior acts coverage refers to a policy that provides complete protection for your previous conduct, with no retroactive date.

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Updated: July 28, 2023
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