What is prior acts coverage in a general liability policy?

Prior acts coverage in a general liability policy is designed to provide protection for claims arising from incidents that occurred before the policy was officially in effect but are reported after the policy has started. This coverage is particularly beneficial for businesses or professionals who may face legal claims stemming from past actions or services related to their operations. It allows them to limit their exposure to unexpected claims that could arise from earlier periods when they were not insured under the current policy.

This type of coverage is essential for ensuring that businesses are not left vulnerable to claims for actions taken before their current policy inception. It recognizes the importance of continuity in coverage, protecting against potential liabilities that may surface even after a policy is initiated.