Run Off Cover Explained for UK Professional Indemnity Insurance
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The Gap That Opens the Day You Stop
You wind down, retire or take an employed role, and you cancel the professional indemnity policy because you are not working any more. Logical, and wrong.
Months later a former client raises a complaint about advice from two years ago. No active policy, no cover, and the claim is yours personally.
This explains why that happens, what run-off cover does about it, how long you need, and the step that can save you buying it at all for problems you already know about.
Why Standard PI Leaves a Gap
Claims-Made, Not Occurrence
Most insurance is occurrence-based: the policy in force when the event happened responds, whenever the claim arrives. Public liability works that way.
Professional indemnity does not. It is claims-made, so the policy that responds is the one in force when the claim is made, not when you did the work. Advise in 2022, get a claim in 2026, and it is the 2026 policy that has to answer, however good the 2022 one was.
While you keep renewing, this is invisible. It only matters when you stop.
What Happens When the Policy Lapses
From that date, any claim about any past work has nothing to respond to, and damages, defence costs and settlements fall on you. Professional negligence claims routinely surface years later, which is precisely the window the lapse opens.
What Run-Off Cover Is
Insurance you buy after you stop trading, covering claims made in the future about work you completed in the past. It covers no new work.
It responds to negligence claims about past services, errors and omissions, defence costs, and compensation. It does not cover anything you do after you stop; that needs a live policy.
Check the Retroactive Date
Run-off inherits the retroactive date of the policy it follows. It covers work back to that date and no further. If you switched insurer at some point and the date was reset, run-off will not repair the hole underneath it. Check this before you buy rather than after a claim.
Check Whether the Limit Refreshes
Ask whether the limit of indemnity applies annually through the run-off period or once across the whole of it. If it is a single limit for six years, one claim in year one can erode what is left for years two to six.
The Step Most People Miss
Before your policy ends, notify any circumstance that might give rise to a claim.
Almost every professional indemnity policy allows this, and it matters enormously at the point of closing down. A circumstance properly notified while the policy is live is captured by that policy year and remains covered even after the policy ends. Run-off is for the unknown. Notification deals with the known.
The angry email you were hoping would blow over, the project that ended badly, the piece of advice the client has queried twice: notify them before the policy expires, in writing, with the facts. It costs nothing and it is the single most useful thing you can do in the final month of trading.
Who Needs It
Anyone who has held professional indemnity and then stops, restructures, or moves into employment.
Retiring. Decades of advice do not stop being claimable the day you stop giving it.
Going in-house. Your new employer’s policy covers the employer’s work going forward. It does nothing for advice you gave as a sole trader or through your old company. This catches out a lot of people who assume the transition is seamless.
Closing a limited company. Winding up does not extinguish the liabilities. And a dissolved company can be restored to the register so that a claim can be brought against it, which claimants do. Run-off must be arranged before dissolution, because a company that no longer exists cannot buy a policy.
Merging or being acquired. Sometimes the acquiring firm assumes the liabilities and its policy picks up your history, in which case separate run-off may be unnecessary. In solicitors’ practice this turns on whether the buyer is a successor practice. Elsewhere it depends entirely on what the sale agreement says. Get it confirmed in writing rather than assumed.
Retiring from a partnership. Partners can carry liability for the firm’s past work. Check what the continuing firm is obliged to maintain, and for how long, before you rely on it.
Changing what you do while still trading. If you drop an activity, make sure the new policy still covers the old work, or arrange run-off for the discontinued part.
One more, rarely discussed: if a sole trader dies, claims can be brought against the estate. Run-off protects the people inheriting it.
How Long
Six Years as the Starting Point
That aligns with the Limitation Act 1980, which generally gives six years from the breach for contract and negligence claims.
Two extensions matter.
Twelve years where the contract was executed as a deed, which covers a great many consultancy appointments and construction contracts. If any of your engagements were deeds, six years of run-off does not match the exposure.
Three years from knowledge for latent damage, with a fifteen-year long-stop, so a problem discovered late can still be claimable long after the work.
Regulated Professions Are Told, Not Asked
Solicitors are the clearest case: the SRA’s minimum terms require closing firms to maintain run-off for six years, with minimum limits of £2 million per claim for sole practitioners and partnerships and £3 million for incorporated practices.
Architects, surveyors, financial advisers, accountants and insolvency practitioners all have requirements set by their own regulators or bodies, and those requirements may also prescribe policy wording rather than just a period. Check directly with yours rather than working from general guidance, including whether the obligation sits with you personally after the entity has closed.
When Six Years Is Not Enough
Construction and property work on dwellings is the standout. The Building Safety Act 2022 extended limitation for Defective Premises Act claims to fifteen years for work after June 2022 and thirty years retrospectively. If you designed, specified or certified residential work, that is the horizon, not six years.
Complex transactional work can also take many years to crystallise.
If your history includes construction, property or anything touching dwellings, discuss a longer term with your broker rather than defaulting to six.
What It Costs
Figures would mislead, because the variables are your profession, the volume and type of past work, the limit, and the claims history. What is broadly true:
- Pricing is usually set against the expiring premium rather than built from scratch
- The cost generally tapers across the run-off period, as the likelihood of a claim falls with time
- Some insurers sell the whole period as a single payment, others charge annually, and the two are not easily compared without working out the total
- Reducing the limit is usually a better lever than shortening the period
Use a specialist broker. Run-off is a niche purchase and the wording matters as much as the number.
When You Are Ready to Stop
- Do not cancel anything yet. Arrange run-off before the live policy lapses so there is no gap.
- Notify every known circumstance to the current insurer, in writing, before expiry.
- Talk to your existing insurer first. Converting the current policy to run-off is often simpler than finding a new home for historic risk.
- Check your regulator’s requirements, including period, limits and wording.
- Check the retroactive date and whether the limit refreshes.
- Arrange it before dissolving a company, not after.
- Keep your records. A claim years later needs documents showing what you did and why.
- Flag unusual past projects to the broker, particularly anything residential.
FAQ
Do I need it if I have never had a claim?
Yes. A clean record helps the premium and does not predict the future. Claims often surface years later, when a client finally understands something went wrong or takes advice.
Won’t my new employer’s policy cover me?
Not for work done before you joined. Their policy covers their business going forward. Your previous practice is your problem unless run-off is in place.
Run-off or retroactive cover, what is the difference?
Retroactive cover is a feature of a live policy, extending it back to a specified date so you stay covered when switching insurer. Run-off is what you buy once there is no live policy at all.
Can I cancel run-off early if nothing has happened?
You can, and it defeats the purpose. If cost is the issue, discuss a lower limit with your broker rather than ending the cover.
I have already dissolved the company. Am I stuck?
Possibly. A dissolved company cannot buy a policy, and it can be restored to the register so a claim can proceed against it. Take advice quickly, because the options narrow once the entity has gone.
Run-Off Cover: The Bottom Line
Professional indemnity is claims-made, so the policy that matters is the one live when the claim arrives. Stop paying and the whole back catalogue is uninsured.
Before your final policy expires, do two things: notify every circumstance you already know about, which locks them into the live policy, and arrange run-off for everything you do not.
Six years is the usual baseline, twelve where contracts were executed as deeds, and considerably longer if your work touched dwellings. And arrange it before dissolving a company, because afterwards there is no one left to buy it.
This article is general information about insurance and UK law, not advice, and it does not take account of your circumstances. Limitation periods, regulatory requirements and policy wordings vary and change. Check your regulator’s current rules and speak to a specialist FCA-authorised broker before relying on anything here.