What is the retroactive date concept on a claims-made policy, and is it relevant to a CGL policy that is usually occurrence?

• A. It sets the earliest date from which incidents may be reported and still be covered under a claims-made policy; in CGL, retroactive date is not the standard concept.
• B. It is the policy's expiration date.
• C. It determines the policy's renewal period.
• D. It defines the policy's liability limit.

Answer: (A)

The retroactive date on a claims-made policy sets the earliest date that an incident can occur for a claim to be eligible for coverage if the claim is reported during the policy period. It creates a backward-looking cutoff so events that happened before that date aren’t covered, unless you have prior-acts coverage or tail protection when switching policies. This is essential in claims-made forms because the trigger is when the claim is made, not when the incident happened, so the retroactive date controls which past events are insurable under the current policy.

A commercial general liability policy, by contrast, is typically an occurrence-based form. It generally covers injuries or damage that occur during the policy period, regardless of when the claim is filed later. Because of that, the retroactive date concept isn’t the standard or primary way CGL coverage is described or limited.

So the statement that the retroactive date defines the earliest incident date eligible for coverage under a claims-made policy—and that this concept isn’t the standard one for an occurrence-based CGL policy—best captures how these concepts work. The expiration date, renewal period, and liability limit are separate policy features and not what the retroactive date describes.