The retroactive date is the cutoff on a claims-made policy. Injury or damage that happened before that date is not covered, even if the claim is made on time during the policy period. Its main purpose is to stop an insured from buying coverage for losses that have already taken place.

The retroactive date normally stays the same at each renewal. If the insurer advances it to a later date, injuries between the old and new dates lose coverage, and that is one of the events that makes an Extended Reporting Period available.

On the standard ISO claims-made CGL, the retroactive date tests when the bodily injury or property damage happened, not when the work was done or the product was made. Example: a contractor installs a handrail before the retroactive date, and the rail fails and injures someone after that date. The retroactive date does not bar the claim. Many professional liability policies work differently: their retroactive date applies to the wrongful act itself.

Prior acts coverage: a claims-made policy with no retroactive date, or with one earlier than the policy's start, has prior acts coverage. A claim made during the policy period may arise from events before the policy began. Do not confuse this with an Extended Reporting Period, which treats claims made after the policy ends as if they were made during it.