What type of coverage applies to an insured before the official policy inception date?

The correct choice, retroactive cover, refers to a type of insurance policy provision that provides coverage for incidents that occur before the formal inception date of the policy. This kind of coverage is designed to protect the insured against claims arising from events that happened prior to the start of the policy, as long as those incidents are otherwise covered by the policy.

In many professional liability insurance scenarios, such as errors and omissions coverage, retroactive cover ensures that practitioners are protected against claims related to actions taken before they purchased the policy. This is crucial for individuals or businesses that may face claims for past actions but want to ensure they have coverage despite the timing of their policy.

The other options do not pertain to coverage before the policy inception date. Run off cover typically provides coverage for claims made after a business has ceased activities, risk appetite refers to the level of risk an insurer is willing to take on, and subrogation is the process by which an insurer seeks recovery from a third party after paying out a claim, which does not relate directly to coverage periods. Thus, when considering coverage for incidents occurring prior to a policy’s start, retroactive cover is indeed the relevant and correct concept.