An E&O (errors and omissions) or professional liability insurance policy provides coverage against malpractice or negligence claims. Its purpose is to protect lawyers and their firms from financial losses tied to lawsuits filed by clients for perceived errors arising from their practice.

An E&O insurance policy usually covers the costs related to litigation, settlements, and payment of damages.

Policies are often arranged on a claims-made basis, this means that only claims made during the policy period are covered. Incidents of negligence or malpractice that took place before the coverage is activated are usually not covered, but some insurance companies offer retroactive policies.

A retroactive date is a component of professional (or E&O)  claims-made policies that determines whether your policy will cover losses that occurred in the past.

Note: Lapses in courage may cause you to lose your retroactive date and reset it to your most recent policy effective date.