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This is one of the most common questions we receive and there’s no simple answer.
Liability claims can be unpredictable. Even your broker can’t guarantee that a specific limit will be enough for every possible scenario. One serious claim involving proven negligence could easily reach millions.
Retroactive cover protects you against claims made now for work you did before your current policy started. Without it, incidents from the past may fall outside your current cover.
Specialist liability insurance is issued on a claims-made basis. This means the policy that responds is the one active at the time you report the claim or incident, not the one that was active when the work was performed.
To ensure you're properly protected, you must have:
Your retroactive date is the point from which your insurer agrees to cover past work. If there’s even a short break in cover, that retroactive protection may be lost, and claims related to past services could be declined.
If you don’t renew your policy (or arrange run-off cover when you stop practicing), any new claims reported after the policy ends won’t be covered, even if the work was done while you were insured.
The only exception is where you formally notified a potential claim in writing while the policy was active, and your insurer acknowledged and registered that notification.
Legal costs and settlements:
Your limit must cover both the cost of legal defence and any damages awarded.
Affordability:
Always aim for the highest limit you can reasonably afford. It’s about balancing risk with cost.
Rising claims:
We’re seeing a clear increase in both the frequency of claims and the size of payouts across many professions.
Think like a claimant:
If someone relied on your advice or service and suffered significant loss or harm, what would their claim be worth? Consider lost income, future expenses, and the long-term impact of the harm suffered.
You should consider a higher limit where you deal with Higher-risk clients
Retirement:
If you’re retiring or emigrating, take the highest limit you can afford before you cease work. Your run-off cover will only extend up to your final active limit.
Business exposure:
If you run a business, you may face claims not only for your own conduct, but also for the actions of staff or contractors. You could also face public liability claims (e.g. injuries on your premises) or product liability claims if you supply or recommend products. These increase your exposure and should be factored into your limit selection.
Don’t wait - early notification is essential. If someone is making allegations or complaining - even informally, please contact us without delay.
Email: claims.cfp@garrun-group.co.za
WhatsApp: 076 284 8108
You are required to notify us as soon as you become aware of any situation that could potentially give rise to a claim or complaint, even if no formal action has been taken yet. Do not wait for a letter from a lawyer or an official notification before reaching out.
Unfortunately, we have seen claims rejected for late notification.
Your medical malpractice insurance policy is a claims-made policy, meaning that the timing of your notification is critical. If in doubt, report it - early notification protects your rights and allows us to support you from the outset.
A claims-made policy provides cover for claims that are made against you during the period your policy is active, provided the event or incident that gave rise to the claim happened after the policy's retroactive date.
This means:
• You must have active cover at the time the claim is made, even if the incident happened earlier.
• The incident must have occurred on or after your retroactive date (a date that’s usually set when you first take out the policy and maintained as long as you keep renewing without a break in cover).
One of the key features of a claims-made policy is that it is essential to notify your insurer of any claim or potential claim (also known as circumstances) as soon as you become aware of it, and while your policy is still active. This is because once you notify the matter, it is considered “made” for the purposes of the policy.
Provided the incident falls within the scope of cover and all the policy terms and conditions are met, the insurer will respond to the claim, even if the actual legal process continues after your policy has expired.
Why is this important?
If your policy lapses or is cancelled before you notify a claim or potential issue, you may not have any cover, even if the incident happened while you were insured. Timely notification is critical to ensure your protection under a claims-made policy.
It is a condition of the policy, that in the event that a complaint/claim/incident report is received by you/your practice, regardless of who it is from, it must be submitted immediately to us in writing.
Do not wait for formal legal action to be taken against you or to receive an official notification from your regulatory body that a complaint has been lodged against you before you notify your insurers of a claim.
If you choose to respond without guidance/consultation, the Insurer’s rights are reserved.
Email: claims.cfp@garrun-group.co.za
WhatsApp: 076 284 8108
Retroactive cover refers to the protection a claims-made policy provides for incidents that occurred before the current policy period, but after the retroactive date stated on your policy schedule.
Key Points to Understand:
The retroactive date is the date you first took out a claims-made insurance policy.
You will not be covered for any claim arising from services rendered before this retroactive date.
This date appears clearly on your policy schedule, which your insurer will provide each year.
Why Is Continuous Cover So Important?
In order to maintain your retroactive cover, you must renew your policy on time every year and ensure there are no breaks or gaps in your cover.
If your cover lapses or is not renewed promptly, you may forfeit your retroactive cover, meaning you will lose protection for past work.
Proving Your Retroactive Cover
It is essential to keep records that show you have maintained continuous insurance, as insurers may require proof of your entitlement to retroactive cover.
Keep the following documents in a safe and easily accessible place, ideally indefinitely:
Policy schedules (from all previous years)
Proof of insurance letters
Proof of payment
Purchasing Retroactive Cover on a New Policy
If you are taking out a new policy (not a renewal), insurers may offer you the option to purchase retroactive cover, often up to 3 years back. However, this will not cover any known or pre-existing issues you were already aware of before the policy started.
This is why it's important to declare any known incidents or complaints when applying for cover.
Run-off cover, sometimes referred to as an Additional Reporting Period, is an extension of your liability insurance policy that allows you to continue reporting claims or potential claims even after you have stopped practicing and are no longer paying for active cover.
What Does It Cover?
Run-off cover does not cover ongoing work or new activities.
It only provides protection for claims or complaints that arise from services you rendered while your policy was active and fully paid.
This is especially relevant for professionals who are retiring, ceasing to practice, or closing their business.
Why Is It Important?
When a claims-made policy lapses (i.e. is not renewed or cancelled), you can no longer report or claim for any incidents, even if the service in question was provided while your policy was active. This could leave you personally liable for claims made after you stop working, a risk that can extend for years.
Run-off cover is therefore crucial to protect yourself, your estate, and your family from future claims, especially in the event of your retirement, incapacity, or even death. We have seen instances where claims were brought against a practitioner’s estate long after they passed away.
Run-off cover is not automatic, we will need to activate the run off based on your entitlement.
Always review your policy and contact us before allowing your policy to lapse or choosing not to renew it.
If you are planning to cease practice, close your business, or retire, we strongly recommend arranging appropriate run-off cover in advance.
