Backdating

What Does Backdating Mean?

Backdating involves assigning a date to a document that is earlier than the actual date it was created, signed, or finalized.

In most cases, backdating is considered fraudulent and illegal. However, there are specific exceptions where it is permissible, such as backdating certain insurance contracts or claims under regulated circumstances.

Insuranceopedia Explains Backdating

When an insurer approves a backdated policy, they become obligated to honor claims for losses occurring during the backdated period, even if the policy was signed after the insured event. However, the claimant typically needs to provide valid reasons for the delay in filing a claim or for not having insurance before the loss.

A policy may be backdated, for instance, if circumstances prevented the contract’s completion at an earlier date. For example, if the insurer delayed processing the agreement due to misplaced paperwork after the terms were agreed upon, they might backdate the policy to rectify the situation.

When a policy is backdated, the insured is usually required to pay premiums for the coverage during the backdated period.