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Retroactive cover, what is it and how will it protect you?

Retroactive Insurance Cover

Many insurance providers offer a range of policies, some Professional Indemnity policies will include retroactive cover.

Others, will not and you could expect to pay an additional charge to include this in your cover. But, what is it? Simply put, retroactive cover means protection for you and your business for past work.

Here are some of the points to consider when reviewing your insurance needs:

Food for thought

Thinking of cancelling your policy? Or fancy switching? Do remember that Professional Indemnity policies are written on a claims made basis. When you are the subject of a claim, or a claim is alleged, the insurer that you have an active policy with is the insurer who will pick up that claim. So, whether you decide to cancel your policy, or move provider, please do check that retroactive cover is included and what the cost may be for adding cover for past work. This will save any future hardship for you and your business.

Protection for the past

Retroactive cover will protect you for any work or contracts you may have undertaken in the past, therefore giving you peace of mind for the future. It is one of the most important things to look for when purchasing Professional Indemnity insurance. You wouldn’t want a call in three years’ time to find you are liable for the collapse of a building due to your structural calculations being incorrect.

In between contracts

If you have just completed a contract, you may think you no longer need your insurance until your next job. Some freelance contractors, after they have signed off their latest contract, call to cancel their Professional Indemnity insurance as they have no other work lined up. At this stage it’s important to think of your past exposure and if it’s worth the risk of being without insurance.

With Caunce O’Hara it’s free with your PI policy

One of the many benefits of having Professional Indemnity insurance with Caunce O’Hara is that retroactive cover is included in your policy free of charge. This cover is backdated all the way to the date you established your business. Meaning that whilst your policy is active with ourselves you are being taken care of, and can trust that we will be here to keep you safe, if past errors come back to haunt you.

Shutting up shop

You have decided to close your business and your contracts are complete.  But, does that really mean it’s all over? Unfortunately, not; depending on the work completed and the terms of your contract you are still liable for mistakes you may have made that could cause your previous clients a financial loss. Many mistakes aren’t discovered immediately, they can be found months or even years after your contract has ended and you have closed your business.

This is where run-off cover comes in handy. Run off cover can be a contractual requirement after your contract has ended. It is an additional security blanket for your future, it will protect you if any future Professional Indemnity claims arise once your business has ceased trading.

By leaving yourself open to a potential claim in the future you as an individual could be liable for the cost of solicitor’s fees, damages and potential compensation awards; which would have to all be paid out of your own back pocket.

To manage the cost Caunce O’Hara provide run off cover at a 50% reduced rate of your current Professional Indemnity policy, giving you that extra peace of mind.

If you have any questions around retroactive cover, or wish to discuss your Professional Indemnity options, call us on 0161 833 2100.


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