Does a contractor need professional indemnity insurance?
Professional indemnity, along with public liability, is one of the key insurance covers that most UK limited company contractors will…
Whether you’ve just taken out a professional indemnity policy or you’re shopping for new business insurance, chances are you’ve come across the term ‘retroactive date’ or ‘retroactive cover’.
Getting your head around the jargon and commonly used insurance terms is the first step to understanding your insurance. Otherwise, you could end up with either a policy that leaves you underinsured or a policy with thrills and frills you don’t need.
So we’re here to clear up what a professional indemnity retroactive date is and how retroactive cover works.
Disclaimer: this is a general guide relating to insurance. Always check your policy documents and schedule for exact coverage details. If you’re unsure, always check with your insurance provider for confirmation.
Understanding retroactive dates for professional indemnity
A retroactive date in insurance is a piece of information relating to something called ‘retroactive cover’. So, before we dive into what a retroactive date is, lets recap on how the cover itself works.
How does retroactive cover work?
Normally associated with professional indemnity (PI) insurance, retroactive cover means your insurance can react to claims resulting from work carried out before your policy start date.
Two of the key dependencies for a claim to be covered are:
- The claim is made during the active policy period
- The work the claim relates to took place on or after the retroactive date (in your policy schedule)
Put simply, if a client makes a new claim against a project you completed years ago, your current insurer can still accept it.
What is a retroactive date in insurance?
A retroactive date is the earliest date from which your insurer will cover work you have carried out in the past.
The retroactive date is shown on your policy schedule and may appear as:
- A specific date (e.g. 01/02/2023), or
- “Unlimited” (meaning no retroactive date restriction applies)
It basically sets the cut-off point for past work. If a claim relates to work carried out before the retroactive date, it won’t be covered – even if the claim is made during your current policy period.
Reminder: always check your policy documents for exact details of your coverage or contact your insurance provider if you’re unsure.
Why is a retroactive date important?
The retroactive date of your professional indemnity insurance (or other applicable cover) is essentially the deciding factor for if a retroactive claim is covered or not.
It’s crucial to understand your retroactive date because ignoring it could leave previous work unprotected and cost your business a pretty penny in defence fees and compensation costs.
Retroactive dates in practice: examples
Let’s lay out a few examples of retroactive dates in context to give a clearer idea how they can affect a claim.
Example 1: A business consultant (covered)
A business consultant worked for a client in June 2021. The client then claimed for professional negligence after financial losses become apparent in 2024.
The consultant had an active PI policy at the time of the claim (2024) with a retroactive date of December 2020.
In this case, the consultant’s claim would be covered as the work was completed after the retroactive date (subject to it being a valid claim approved by their insurer).
Example: A trades professional (not covered)
A trades contractor incorrectly assessed installation safety checks on a project in February 2018. In 2025, the client claims professional negligence after discovering the assessment error and paying out to replace the unsafe installation.
The contractor did have a policy active in 2025 at the time of the claim, but his retroactive date was January 2019 – after the work being claimed against was completed.
In this case, the contractor wouldn’t be covered.
Will you lose your retroactive cover if you change insurers?
It is possible to transfer your retroactive date to a new insurer, but only if you make them aware of your current retroactive date and confirm with them that they’ll honour it.
A few things to keep in mind though:
- If you didn’t hold insurance when the work was carried out, your new insurer might not agree to retroactively cover it.
- Depending on your claims history or previous coverage, the new insurer might set your retroactive date as the start of new your policy – not your original one.
- If you fail to disclose past claims or work you could reasonably expect to result in a claim, your new insurer may not cover you.
Tip: Always check the retroactive date on your new schedule before cancelling any currently active ‘old’ policies (i.e. it needs your previous date if you want seamless protection).
Support from Kingsbridge
As always, our in-house insurance experts are on hand to help. If you’re still unsure about what your retroactive date means, how retroactive cover works with your professional indemnity insurance or you just have a general query about business insurance, get in touch!
Our Professional Indemnity Insurance
Did you know we offer Professional Indemnity Insurance as part of our standard Business Insurance Package and Contractor Insurance?
You can get a quote online or call our expert team on 01242 808740 to talk through your needs – we can help make sure you have the right level of cover for your business.
