Short answer
When you raise limits, the effect on your retro date often surprises engineers and architects. Increasing professional liability limits can mean the new insurer gives prior acts coverage back to your old retro date, but only up to your old limits. The higher limit often starts on the new policy’s start date. That arrangement is called a split retro date. Past projects stay covered at the lower limit, subject to policy terms. It is common, so confirm it before you sign. Whether a policy responds depends on its wording and the facts.
Retro dates in one paragraph
Most professional liability policies are claims-made. They respond to claims first made during the policy period, and only for work performed after the retroactive date, or retro date. Work done before that date generally falls outside the policy. Our retro date explainer and claims-made page cover the basics in more detail.
The IRMI glossary entry on the retroactive date gives a standard definition. Your policy wording controls how the date applies.
What a split retro looks like when increasing professional liability limits
A split retro gives each layer of limits its own date. The old limits keep the original retro date. The new, higher limits start fresh. A simple example shows the idea.
| Layer of limits | Retro date |
|---|---|
| First layer, matching the old policy | Original retro date |
| Additional limits above the old policy | New policy start date |
Say an engineer carried a low-limit online policy for several years. The new policy offers a much higher limit. A claim arises from a project completed before the switch. The claim may reach the old limit under the old retro date. The extra limit may not apply, since it begins on the new start date.
A claim from work done after the switch can access the full limit. Your actual terms depend on the policy and the carrier.
Why insurers use a split retro
Insurers use a split retro because they did not collect premium for higher limits on past work. The old policy priced only the lower limit. Offering the higher limit on every past project would expose the new insurer to claims it never rated.
This is a normal underwriting practice, though terms vary by carrier and form. Some insurers may offer a different arrangement for an additional premium.
What the online policy may have lacked
Low-limit online policies can differ from a full A&E policy in several ways. Common gaps include:
- Low limits that fall short of contract requirements
- Exclusions for condo or other project types
- Limited servicing when a claim or contract question arises
Online policies suit some firms at certain stages. A firm that outgrows one often finds its contracts ask for more. Our article on why a cheap online E&O policy may not cover your engineering work covers these differences.
Moving mid-term
Moving from one policy to another takes planning. Cancelling the old policy may produce a pro rata refund, depending on the terms. Line up effective dates so no gap appears between the old policy and the new one.
A gap can cause real problems on a claims-made policy. A claim made during a gap may fall outside both policies. Ask your agent to confirm the dates in writing before you cancel anything.
Questions to ask your agent
These questions can guide the conversation:
- What retro date applies to each layer of limits?
- Is there a gap between the old and new policy?
- Can the full limit’s retro date be backdated, and at what cost?
- Does the new policy contain exclusions the old one did not?
What we see at Hardcover
A structural engineer upgraded from a low-limit online policy to a $1M A&E form. The new insurer matched his retro date for the first layer of limits and set the higher limits to start on the new policy date.
He told us he was “still better off than I currently am,” and he was, once he understood how the two layers worked. The surprise came from learning about the split after reviewing the quote, not before.
Related questions
Even though I wasn’t insured with this company before, can people still reach back and go after older work?
Yes. A claim can arise from older work even if the new insurer did not cover you at the time. Prior acts coverage, tied to your retro date, determines whether the new policy may respond. Check how the new policy treats work done before it started.
What is a split retro date?
It means different retro dates for different layers of limits. Usually the old date applies to the old limits, and the policy start date applies to the new, higher limits.
Are my old projects covered after I switch?
Usually, if prior acts coverage matches your old retro date. Coverage often applies only up to your old limits, subject to the policy terms.
Can I avoid a split retro?
Sometimes, for an extra premium. Ask your agent whether the carrier offers that option.
General education, not legal advice. Hardcover is an insurance agency, not a law firm.