A supplement to a claims-made policy, prior acts coverage is purchased from a new carrier when you change insurance companies. This coverage, also known as nose coverage, covers claims from unknown incidents that occurred before the beginning of your new policy. Prior acts coverage is an alternative to tail coverage, which is purchased from the original carrier when a change in insurance companies is made.
Companies typically require new policyholders to purchase either prior acts from them, or tail coverage from their prior carrier, to protect against claims arising from prior acts.
