Which of the following best describes retroactive cover?

Retroactive cover refers specifically to a type of insurance policy that provides coverage for events or liabilities that occurred before the policy was officially in force. This means that if an incident took place prior to the start date of the coverage, the insured can still make a claim regarding those past events, provided that the policy includes explicit retroactive coverage.

This is particularly beneficial in situations where risks or liabilities may not be immediately apparent and can emerge after the policy has been purchased. Professional indemnity and liability insurance often include retroactive coverage to protect professionals against claims arising from acts or omissions in the past.

The other choices presented do not accurately capture what retroactive cover entails. For instance, coverage for future liabilities only would indicate that any events occurring before the policy's inception are not included, which contradicts the core of retroactive cover. A strategy to manage risk exposure suggests a broader risk management approach without focusing on specific past events, and recovering damages from third parties involves legal claims rather than insurance coverage specifics. Thus, option B is the most accurate description of retroactive cover, highlighting its unique provision for past events.