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Prior Acts

What are Prior Acts?

Prior Acts may refer to a concept in insurance law, specifically a type of insurance called Directors and Officers (D&O) liability insurance. D&O insurance protects directors and officers of organizations from potential liability claims arising from their business activities. Prior Acts coverage is a type of coverage that may be included in a D&O policy that provides protection for claims made against the insured for wrongful acts that occurred prior to the policy’s effective date. Thus, Prior Acts coverage may provide protection for acts or omissions that occurred before the policy was in force.

Prior Acts in More Detail

In short, Prior Acts are any acts or omissions occurring prior to the policy’s effective date that may be the subject of a liability claim. This definition of Prior Acts is important to understand, as the scope of coverage provided by a D&O policy may be limited to wrongful acts that occurred after the policy’s effective date. Thus, Prior Acts coverage may be particularly important to organizations with a long history of business activities, as it provides protection for any potential claims arising from those activities.

Prior Acts coverage may also be referred to as “retroactive” or “tail coverage.” This type of coverage is especially important for organizations that have experienced a change in ownership or management. It ensures that any claims arising from acts or omissions that occurred prior to the policy’s effective date are still covered by the policy.

In conclusion, Prior Acts is a term used to refer to any acts or omissions occurring prior to the policy’s effective date that may be the subject of a liability claim. This type of coverage is especially important for organizations that have experienced a change in ownership or management, as it provides protection for any potential claims arising from those activities.

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