Run-Off
Insurance

Run-Off Professional Indemnity Insurance protection for when you stop trading.

When you retire or cease trading, you still need the protection of Professional Indemnity Insurance that covers you should claims arise from your past work. Just because you are no longer trading and in business does not mean you have left your professional liabilities behind and you could still be exposed to costly claims from your past work.

Professional bodies such as the RICS, ARB, ABE, and CIAT either require or strongly recommend their members to maintain Professional Indemnity Insurance for a minimum of six years from the date they have stopped trading. This is known as Run-Off Professional Indemnity Insurance.

Remember you can only notify potential claims against a current Professional Indemnity Insurance policy, yet there are situations where you may not become aware of a claim until after you have finished work. Due to the “claims made” basis of cover that applies under a Professional Indemnity policy, it is not the Insurer that insured you at the time you were working that is relevant, but the Insurer you are with on the day you first become aware of a circumstance that could give rise to a claim. A good example of this would be a pre-acquisition Building Survey, Home Buyer Report, or Design Work where it could be months or even years after your work was completed before your client informs you of a problem. If you don’t have a current Professional Indemnity policy in force then you won’t have any insurance protection in place and you won’t be insured. This emphasises why it is extremely important to arrange Run-Off Professional Indemnity Insurance after you have ceased to trade.

Run-Off cover is normally provided by the last Insurer that insured your business at the time you fully retired or ceased trading. Your current policy would normally be amended so that cover is restricted to only cover the past work of the business up to a ‘specified Run-Off date’.

Upon request and in some circumstances, it may be possible to arrange a long-term policy with a period of insurance of up to 6 years.