What is prior acts coverage and why does it matter?

Prior acts coverage, sometimes called nose coverage, is a provision in a claims-made malpractice policy that extends protection to alleged errors or omissions that occurred before the current policy period began. This is one of the most important features to evaluate when purchasing or renewing legal malpractice insurance.

In a claims-made policy, coverage is triggered when a claim is first reported during the active policy period. Without prior acts coverage, a claim arising from work you performed three years ago would not be covered under your current policy if that policy only responds to acts committed on or after its inception date. The prior acts date, also called the retroactive date, determines how far back in time your coverage extends.

The ideal prior acts date is the date you first began practicing law or the date you first obtained continuous malpractice coverage, whichever is earlier. This is sometimes referred to as full prior acts coverage. When you maintain continuous coverage with the same carrier, your prior acts date typically remains fixed at your original inception date, and each renewal extends your coverage forward without creating gaps in retrospective protection.

Problems arise most frequently when attorneys switch carriers. A new carrier may offer a prior acts date that matches your current coverage, or it may attempt to limit the retroactive date to the new policy's inception date. If the new carrier restricts your prior acts date, you lose coverage for claims arising from work performed before that date. This gap can be addressed by purchasing tail coverage from your departing carrier, but that comes at additional cost.

When evaluating a new policy or a carrier change, always confirm the prior acts date in writing before binding coverage. Verify that it matches the retroactive date on your expiring policy. If there is any gap, you face a period of uninsured exposure that cannot be remedied after the fact. Some carriers will match your existing prior acts date as a competitive incentive, while others may restrict it based on their underwriting appetite. Never sacrifice your prior acts date solely to obtain a lower premium, as the long-term risk far outweighs the short-term savings.