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Professional Indemnity Run-Off Cover
What is professional indemnity run-off cover?
Run-off cover is professional indemnity insurance that keeps responding to claims after your firm has stopped trading. Professional indemnity is written on a claims-made basis, which means the policy that pays is the one in force on the day a claim is made against you, not the one in force when you did the work. Close the firm, retire, sell the practice or simply stop renewing, and every piece of advice you have ever given becomes uninsured the moment the policy expires — even though it was properly insured at the time. Run-off cover buys back that protection for a defined period after cessation, and for most regulated professions it is mandatory rather than optional.
Key facts at a glance
- Claims-made means the cover dies with the policy. Work done in 2019 under a policy that lapsed in 2026 is uninsured if the claim arrives in 2027. The date that matters is when the claim is made against you, not when the work was done.
- Six years is the usual minimum, and it is not arbitrary. It tracks the limitation period for contract and tort claims under the Limitation Act 1980. Claims under a deed can run to twelve years, and construction work can run very much longer.
- RICS firms get six years automatically for consumer claims — but not for commercial ones. Under the RICS minimum wording, insurers provide six years of consumer run-off with a £1,000,000 aggregate limit where premium has been paid. Business-to-business run-off must be purchased separately, and that is the gap most surveying firms miss.
- ICAEW requires two years, then all reasonable steps for four more. Regulation 2.8 of the ICAEW Professional Indemnity Insurance Regulations, effective 1 September 2024, replaced the old "best endeavours" wording with "all reasonable steps" — a deliberately higher bar, producing six years in total.
- Dissolving the company does not end the exposure. A dissolved company can be restored to the register under the Companies Act 2006 specifically so that a claim can be brought against it. Striking off is not a limitation defence.
- Individuals can be sued personally. In Merrett v Babb the Court of Appeal held an employed surveyor personally liable to a house buyer after the firm's cover was unavailable. Professional negligence can attach to the person who signed the work, not only the entity that employed them.
- Run-off must be fully retroactive to be worth anything. A run-off policy with a retroactive date set at cessation covers nothing at all, because by definition no work was done after that date. The retroactive date has to reach back across your entire working history.
Run-off is the most consequential insurance decision a professional firm makes, and it is almost always made at the worst possible moment: during a retirement, a sale, a merger, or the wind-down of a business that has stopped earning. The premium arrives when there is no longer any income to pay it from, which is precisely why firms are tempted to skip it.
They are also the placements generalist brokers handle worst. A firm that is still trading is an attractive risk with a renewal attached. A firm that has ceased is a one-off premium for a liability that lasts six years, with no follow-on business, and a number of markets simply will not quote it. That is the problem this page exists to solve.
Why does a claims-made policy stop protecting you the day it expires?
Because a claims-made wording triggers on notification, not on the act. Most business insurance — public liability, employers' liability, property — is written on an occurrence basis: the policy in force when the event happened responds, however long ago that was. Professional indemnity is different. The trigger is the claim being made against you and notified during the period of insurance. That single structural difference is why a closed firm without run-off is not "probably fine"; it is definitively uninsured for everything it ever did.
The practical consequences are worth stating plainly, because professionals who have carried PI for twenty years frequently do not know them:
- Continuous cover is what protects old work. Each year's policy covers claims made that year, about work done at any point after the retroactive date. A gap of even one day in that chain creates a hole that later policies will not fill.
- Switching insurer is not a risk event; lapsing is. Moving between insurers is routine provided the new policy carries forward the retroactive date. Letting cover lapse and restarting later almost always resets the retroactive date to the new inception, orphaning everything before it.
- Notification of circumstances matters more than most people realise. If you become aware of something that might give rise to a claim, notifying it during the current policy period locks it into that policy. Say nothing, close the firm, and the claim arrives later with nowhere to go.
- "No claims in thirty years" is not a reason to skip run-off. The whole point of a claims-made long tail is that the claim you have not had yet is the one run-off exists for. Professional claims frequently surface years after the work — a tax position challenged on an enquiry, a valuation tested when a property is sold, a scheme design questioned after a defect appears.
The question to ask before you cancel anything. "If a claim about work I did five years ago landed on my desk next March, which policy would pay it?" If you cannot name one, you need run-off — and you need to arrange it before the current policy expires, not after. Once there is a gap, the market gets materially harder and sometimes closes entirely.
Why is the retroactive date the most important number on your schedule?
Because it defines how far back your cover reaches, and a run-off policy with the wrong one is worthless. The retroactive date is the point before which work is not covered, no matter when the claim arrives. For run-off to do its job it must be fully retroactive — reaching back to the start of your practice, or at minimum to the retroactive date carried on your last trading policy. A run-off policy dated from cessation covers a period in which, by definition, you did no work.
Retroactive dates get damaged in a handful of specific, recognisable situations. Each is worth checking against your own history:
| Situation | What happens to the retroactive date | What to do |
|---|---|---|
| Cover lapsed and was restarted | Usually reset to the new inception date, orphaning all earlier work permanently | Never allow a gap; if one exists, disclose it and seek a fully retroactive quote before closing |
| Changed legal structure — partnership to LLP, LLP to limited company | The old entity may cease to exist as an insured, leaving its work unprotected | Either extend the new entity's cover to the predecessor's work, or buy run-off on the old entity |
| Practice sold or merged | The acquired firm's policy usually ceases at completion | Confirm in writing whether the acquirer's policy covers past work; if not, buy separate run-off |
| Successor practice arrangement | Can work well, but only if the successor's insurer accepts the predecessor's liabilities in writing | Get the position documented before completion — not as a post-completion assumption |
| New insurer imposed a later retroactive date | Cover silently narrows at renewal, often unnoticed for years | Compare the retroactive date on every renewal schedule against the previous one |
| Sole trader incorporating | The individual's earlier work sits outside the company's policy | Ensure the company policy names the predecessor practice and carries the earlier date |
A two-minute check worth doing today. Find your current PI schedule and locate the retroactive date. If it reads anything later than the date you started practising, there is already a period of your working life that no policy covers — and run-off will not fix it retrospectively. Better to discover that now than during a claim.
When do you actually need run-off cover?
Whenever the policy that has been protecting your past work is about to stop existing. That is a wider set of circumstances than "retirement". Selling the practice, incorporating, dissolving a partnership, losing a regulated permission, a principal dying, or an acquirer declining to take on predecessor liabilities all produce the same result: a body of past work and no live policy attached to it.
- Retirement or cessation of practice. The clearest case, and the one the regulators legislate for.
- Sale of the business. Whether run-off is needed depends entirely on what the sale agreement says about past liabilities, and on whether the buyer's insurer has actually agreed to pick them up.
- Merger or acquisition. The acquired entity's policy typically ceases at completion. Somebody has to cover what it was insuring.
- Change of legal structure. Incorporating, converting to an LLP, or restructuring can extinguish the old insured entity even though the same people continue the same work.
- Dormancy. A firm that stops trading but is not formally wound up still carries its past exposure, and frequently stops renewing because "we're not doing anything".
- Death or incapacity of a principal. Estates are pursued. Run-off protects the family as much as the practice.
- Ceasing one regulated activity while continuing others. Dropping a service line can strip that activity out of next year's cover, leaving its history exposed.
- Insolvency of the firm. An administrator or liquidator will want to know the run-off position, and directors' own exposure sits alongside it — see our guide to directors and officers insurance and to insurance after insolvency or liquidation.
From recent placement conversations
"The conversation I dread is the one that starts 'I retired in March and someone's just sent me a letter.' By then there is nothing to arrange. Run-off has to be bought while the policy is still live, and the number of people who cancel a direct debit as the last act of closing a business — without realising what they have just switched off — is much higher than it should be."
"The other one is the sale. Somebody sells their practice, the heads of terms say the buyer assumes the liabilities, and everyone relaxes. Nobody asks the buyer's insurer whether it has agreed to that. An indemnity from a company is worth whatever that company is worth in six years' time. An insurer's written confirmation of a retroactive date is worth considerably more."
How long should run-off cover last?
Six years is the regulatory floor for most professions, but the right answer is set by your longest unexpired liability, not by the minimum. Contract and tort claims generally have six years under the Limitation Act 1980. Work done under a deed carries twelve. Latent damage adds three years from the date of knowledge with a fifteen-year longstop. Construction professionals face longer periods again under the Defective Premises Act 1972 as amended by the Building Safety Act 2022.
| Profession / regulator | Run-off position | Practical note |
|---|---|---|
| Surveyors (RICS) | Fully retroactive run-off required; six years for consumer claims provided automatically under the minimum wording, with a £1,000,000 aggregate limit | Commercial claims run-off is a separate purchase. This is the single most commonly missed gap in surveying practices |
| Accountants (ICAEW) | Two years mandatory, then all reasonable steps to maintain cover for a further four — six in total under Regulation 2.8 | The 2024 change from "best endeavours" to "all reasonable steps" raised the bar deliberately |
| Solicitors (SRA) | Six years run-off is an obligation of the closing firm under the Minimum Terms and Conditions | A successor practice arrangement can displace it, but only if genuinely constituted |
| Architects | Six years recommended as a minimum | Deeds of appointment routinely carry twelve-year liability, so six is frequently not enough |
| Financial advisers (FCA) | Personal investment firms are expected to maintain appropriate run-off on ceasing regulated business | Complaint time limits and the Financial Ombudsman Service drive the real exposure — see below |
| Engineers and construction consultants | No single regulator; driven by appointments and collateral warranties | Twelve years under deed is standard; Building Safety Act exposure can reach considerably further |
| Unregulated consultants | No mandatory requirement | Six years is still the sensible default, because the Limitation Act applies whether or not a regulator does |
Where six years is the wrong answer. If you signed appointments or collateral warranties as deeds — normal for architects, engineers, surveyors and construction consultants — your liability under those documents runs for twelve years, not six. A six-year run-off leaves the back half uninsured. Check the execution clause on your largest appointments before you set the term. Our guides to principal designer PI insurance and rail design and engineering PI cover how those appointments work. Engineering firms should also see our engineers insurance page.
How does the Insurability Framework apply to a closing firm?
A ceasing firm is an unattractive risk by construction: a single premium, no renewal, and a liability that outlives the relationship. Several mainstream markets decline run-off on that basis alone, regardless of the firm's claims record. Placing it well is a specialist exercise in presenting a business that no longer exists to an underwriter who will never see it again. The Insurability Framework™ is our structured method for doing exactly that.
The Insurability Framework applied to run-off placements
Four pillars, applied to firms closing, retiring, selling, restructuring or exiting a regulated activity.
Run-off underwriters price the tail, not the trading. What moves the number is the mix of work in the last six years, the largest single appointment, the retroactive date, any notified circumstances, and whether the closure is orderly or distressed. We put all of it in front of them before it is asked for.
A one-off premium with a six-year liability and no renewal falls outside a lot of appetite. Placement runs through Lloyd's syndicates and specialist MGAs that write run-off deliberately rather than tolerating it, including for firms whose incumbent insurer has declined to offer terms.
The dangerous gaps are structural: a retroactive date that does not reach back far enough, a term set to six years against twelve-year deeds, an assumed successor practice that was never documented, and activities dropped from cover in a previous year.
A run-off claim arrives at someone who has retired, has no practice management behind them and may not have the file. Reconstructing the position and running the notification properly is work a call centre cannot do, and it is the point at which run-off either earns its premium or does not.
More on the method on our Insurability Framework page, and on comparable placements in our adverse risk insights hub.
What does run-off look like for your profession?
The regulatory floor, the real exposure and the placement difficulty differ substantially by discipline. Select the closest match.
Run-off cover checker by profession
Surveyor (RICS regulated)
- LEGAL Fully retroactive run-off is required by the RICS Rules on ceasing to practise.
- CRITICAL Six years of consumer run-off comes automatically under the minimum wording with a £1,000,000 aggregate — commercial claims do not. Buy that separately.
- ESSENTIAL Check whether the £1,000,000 aggregate is adequate across the whole six years, not per claim.
- ESSENTIAL Valuation work is the dominant claims driver and the dominant rating factor. Declare the split accurately.
- RECOMMENDED Where the market will not quote commercial run-off, the RICS Run-off Pool exists as a fall-back rather than a first option.
- CONSIDER Fire safety and cladding-related exposures, which have materially changed the surveying PI market.
Accountant (ICAEW regulated)
- LEGAL Two years mandatory run-off under Regulation 2.8, then all reasonable steps for four more.
- CRITICAL Tax advice is the long-tail exposure. An enquiry opened years later tests advice given long before.
- ESSENTIAL Audit work, where carried out, is rated separately and materially.
- ESSENTIAL Where the practice is sold, confirm in writing whether the acquirer's insurer covers predecessor work.
- RECOMMENDED Route via our accountants PI form for an intake built around relevant income and work split.
- CONSIDER Insolvency practitioner work, which sits outside a standard accountancy wording.
Architect, engineer or construction consultant
- CRITICAL Six years is very likely the wrong term. Appointments executed as deeds carry twelve-year liability.
- CRITICAL Building Safety Act exposure can reach far beyond any conventional run-off term on higher-risk buildings.
- ESSENTIAL Collateral warranties given to funders and tenants create separate claimants with their own limitation clocks.
- ESSENTIAL Fire safety, cladding and combustible materials exclusions need reading in the run-off wording, not just the trading one.
- RECOMMENDED Use our architects PI form or engineers PI form for a discipline-specific intake.
- CONSIDER Whether any appointment obliges you contractually to maintain PI for a stated period — many do, and breaching it is a separate liability.
IFA or financial adviser (FCA regulated)
- LEGAL The FCA expects personal investment firms ceasing regulated business to hold appropriate run-off.
- CRITICAL Ombudsman complaint time limits, not the Limitation Act, drive the real tail — see the section below.
- CRITICAL Defined benefit pension transfer advice is the hardest single activity to place in run-off, and some markets exclude it outright.
- ESSENTIAL Exclusions in the policy can trigger additional capital resources requirements under IPRU-INV 13. Read them against the rules, not in isolation.
- ESSENTIAL If you were an appointed representative, establish whose policy covered your past advice before assuming it was yours.
- CONSIDER Cancelling permissions and closing the firm are separate exercises from arranging run-off, and the order matters.
IT and technology consultant
- ESSENTIAL No mandatory regulator, but client contracts frequently require PI to be maintained for a period after completion.
- ESSENTIAL Check whether your cover is PI alone or combined with cyber — the two behave differently in run-off.
- ESSENTIAL Software delivered years ago can fail years later, and the claim is against the adviser who specified it.
- RECOMMENDED Use our technology PI form, and see our tech contractors page.
- CONSIDER Whether data held during the engagement creates a residual exposure — see cyber insurance.
Management or general consultant
- ESSENTIAL No regulator, so the Limitation Act sets the term: six years is the sensible default.
- ESSENTIAL Review your largest engagements for contractual obligations to maintain cover post-completion.
- ESSENTIAL Where advice touched regulated territory — pensions, investments, immigration, health and safety — expect different questions.
- RECOMMENDED Use our miscellaneous PI form where no discipline-specific form fits.
- CONSIDER Whether a single large client dominates the tail, which changes how the risk is rated.
Can you be sued personally after the company is dissolved?
Yes, on two separate routes, and this is the part most professionals underestimate. First, a dissolved company can be restored to the register under the Companies Act 2006 precisely so that proceedings can be brought against it — striking off is not a limitation defence. Second, and more uncomfortably, professional negligence can attach personally to the individual who did the work. In Merrett v Babb the Court of Appeal held an employed surveyor personally liable to a house buyer who had relied on his valuation, in circumstances where the firm's insurance was not available to respond.
The practical implication is that limited liability is a much weaker shield than it appears once a firm has closed. Three points follow:
- Run-off protects people, not just entities. Where the policy is properly constituted it responds for former principals, partners and employees in respect of the firm's past work. Where there is no policy, the claimant's route to a solvent defendant is the individual.
- Estates are pursued. A claim arising after a principal's death is made against the estate, which means the exposure lands on a family rather than a business.
- Personal assets are what is at stake. This is not a theoretical concern at the margins; it is the reason run-off exists as a professional obligation rather than a commercial choice.
What is different about run-off for IFAs and financial advisers?
The tail is set by complaint rules rather than by the Limitation Act, and the hardest activities are frequently excluded. A complaint to the Financial Ombudsman Service can generally be brought within six years of the act complained of, or — if later — within three years of the point at which the complainant became aware, or reasonably ought to have become aware, that they had cause for complaint. On long-dated advice such as pension transfers, that second limb can extend the realistic exposure well past six years from cessation.
That structure produces a set of problems specific to advisory firms winding down:
- Defined benefit pension transfer advice is the hard one. It has driven a substantial share of the sector's claims, and a number of markets will not write run-off that includes it at any price. Where it can be placed, it is rated separately and heavily.
- Exclusions have a capital consequence. Under IPRU-INV 13, exclusions in a personal investment firm's policy require additional capital resources calculated by reference to relevant income. A cheaper policy with wider exclusions is not automatically a cheaper outcome.
- The Ombudsman award limit is indexed annually. It rises each 1 April, and the level that applies depends on when the act or omission occurred. Set limits against the exposure, not against a figure remembered from a previous year.
- Appointed representative history needs establishing. If you advised as an AR of a network, the network's policy may have covered that work — or may not, and may itself have ceased. Establish the position in writing rather than assuming it.
- Order of operations matters. Arranging run-off before cancelling permissions is materially easier than the reverse.
Where the FCA rules actually sit. The professional indemnity requirements for personal investment firms are in IPRU-INV 13 of the FCA Handbook, and the complaint time limits are in the DISP sourcebook. Both are worth reading directly rather than relying on summary, because the additional capital resources tables turn on your own relevant income figures.
Which gaps should you check before you close?
Tick anything you cannot answer immediately. Each is a gap we find regularly in firms approaching cessation.
Run-off cover gap checklist
- You do not know the retroactive date on your current PI policy.
- That retroactive date is later than the date you started practising.
- There has been a gap in PI cover at some point in the firm's history.
- The firm has changed legal structure and you have not confirmed the predecessor entity is covered.
- You are relying on a buyer or successor practice assuming liabilities, without written insurer confirmation.
- You have signed appointments as deeds but are planning only six years of run-off.
- You are RICS regulated and have not bought commercial claims run-off separately.
- There are circumstances you are aware of that have not been formally notified.
- A service line was dropped from cover in a previous year and its history is unaccounted for.
- You have not checked whether any client contract obliges you to maintain PI after completion.
- You intend to cancel the policy or the direct debit as part of closing down.
- Nobody has confirmed who holds the claims files and correspondence after the office closes.
Three or more ticks and the run-off position needs sorting before anything else in the wind-down. Items one to five are the ones that cannot be fixed after the policy expires.
How hard will your run-off be to place?
Run-off placement assessor
What does run-off cover cost?
Usually a multiple of the last trading premium, paid once, covering the whole term. The market convention is to price the full run-off period as a single premium expressed as a percentage of the expiring premium, with the figure driven by the profession, the work mix in the tail, the limit required and the term. It is not an annual cost and it does not reduce each year — you are buying a fixed liability, not a service.
| Rating factor | Why it matters to the underwriter | What improves the terms |
|---|---|---|
| Profession and work mix | Valuation, pension transfer and structural design work dominate claims data | An accurate split of the last six years' fee income by activity |
| Run-off term required | Twelve years is double the exposure window of six | Evidence of which appointments were deeds and when they complete |
| Limit of indemnity | Sets the ceiling on the insurer's tail liability | Matching the limit to the largest appointment rather than to habit |
| Claims and circumstances history | Frequency predicts the tail better than severity | Full disclosure with a documented account of what changed afterwards |
| Notified circumstances at cessation | A known matter is a priced matter | Notifying properly under the expiring policy rather than carrying it into run-off |
| Retroactive date | Determines how many years of past work sit inside the cover | Nothing — but knowing it prevents buying cover that does not attach |
| Manner of closure | Distressed and insolvent closures attract a different appetite | Arranging run-off while the firm is still solvent and trading |
| Whether a gap already exists | A lapse is the hardest single feature to place around | Acting before expiry — this is the factor most within your control |
| Presentation quality | Few markets write run-off deliberately; ambiguity gets priced or declined | A structured submission with the retroactive date, work split and claims record up front |
The cheapest possible run-off is the one arranged early. Terms obtained while the firm is still trading, with cover continuous and no gap, are materially better than terms sought after expiry — and in some cases the difference is between a quote and no quote at all. If closure is on the horizon at all, raise it at your next renewal rather than at your last.
What if you have been declined run-off cover?
A decline from your incumbent insurer is not the market's answer, it is one underwriter's answer. Run-off declines are frequently structural rather than personal — the insurer has exited the class, will not write the activity, or simply does not offer run-off beyond its own book. Firms that have been refused are placeable more often than they expect, but the route is a specialist submission to markets that write this deliberately, not a repeat application to the same panel.
What we do with a declined run-off placement:
- Establish precisely what was declined and why. A decline on defined benefit transfer advice is a different problem from a decline on a lapsed retroactive date, and they lead to different markets.
- Rebuild the presentation. Most declined submissions are thin. The tail's work split, the largest appointments, the claims narrative and the retroactive history are usually missing and usually decisive.
- Consider structure. A shorter term with an option to extend, a higher excess, a lower limit, or excluding a single activity and insuring the rest can all convert a decline into terms.
- Use the regulator's fall-back where one exists. RICS firms unable to procure commercial run-off on the open market have the Run-off Pool available, and it is a fall-back rather than a first port of call.
Related reading: insurance for businesses refused cover, professional indemnity after a claim and business insurance with a claims history.
John Miller — Director & Principal Broker
John has spent over thirteen years placing specialist commercial risks, with a particular focus on businesses at the difficult end of their lifecycle. Run-off is the clearest example he encounters: a firm that has done everything properly for twenty years, closing tidily, and discovering at the last moment that the policy protecting two decades of work is about to switch off. He works with surveyors, accountants, architects, engineers, advisers and consultants on the structural questions — whether the retroactive date reaches far enough back, whether six years is the right term against twelve-year deeds, and what to do when the incumbent insurer will not offer run-off at all.
Former #1 Account Executive at Brown & Brown and former #1 Salesperson at AXA, with direct access to the Lloyd's Market and specialist MGA schemes.
Glossary of run-off insurance terms
- Run-off cover
- Professional indemnity insurance covering claims made after a firm has ceased trading, in respect of work carried out before cessation.
- Claims-made basis
- The policy trigger used for professional indemnity. The policy in force when the claim is made responds, regardless of when the work was done.
- Occurrence basis
- The alternative trigger, used for liability and property insurance. The policy in force when the event happened responds, however long ago.
- Retroactive date
- The date before which work is not covered. For run-off to function it must reach back across the firm's entire working history.
- Fully retroactive
- A policy with no retroactive date restriction, covering all past work irrespective of when it was performed.
- Notification of circumstances
- Reporting a matter that may give rise to a claim. Notifying during the current period locks the matter into that policy even if the claim arrives later.
- Successor practice
- A firm treated as taking on a predecessor's liabilities, which can displace the need for separate run-off — but only where properly constituted and confirmed by the insurer.
- Minimum Terms and Conditions
- The compulsory policy wording set by a regulator, prescribing what cover must contain. Used by the SRA and, in a different form, by RICS.
- Run-off Pool
- The RICS fall-back arrangement for regulated firms unable to procure commercial claims run-off on the open market.
- Limitation period
- The statutory window for bringing a claim. Generally six years for contract and tort, twelve for a deed, with separate rules for latent damage.
- Latent damage
- Damage not reasonably discoverable at the time. Adds three years from the date of knowledge, subject to a fifteen-year longstop.
- Deed
- A document executed with additional formality, carrying a twelve-year limitation period rather than six. Common in construction appointments.
- Collateral warranty
- A contract giving a third party such as a funder or tenant a direct claim against a consultant. Each one creates a separate claimant with its own clock.
- Aggregate limit
- The maximum payable across all claims in the period. In run-off this is the maximum across the entire term, not per year.
- Relevant income
- The FCA measure used to calculate professional indemnity requirements and any additional capital resources for personal investment firms.
- Appointed representative
- A firm carrying on regulated activities under the responsibility of an authorised principal. Whose policy covered past advice needs establishing in writing.
- Restoration to the register
- The Companies Act process by which a dissolved company is restored so that proceedings can be brought against it. Dissolution is not a limitation defence.
Frequently asked questions
What is professional indemnity run-off cover?
It is professional indemnity insurance that continues to respond to claims after a firm has stopped trading, in respect of work carried out before cessation. Because professional indemnity is written on a claims-made basis, the policy that pays is the one in force when the claim is made rather than when the work was done. Without run-off, a closed firm is uninsured for everything it ever did, even though every year of that work was properly insured at the time.
How long do I need run-off cover for?
Six years is the usual minimum and tracks the limitation period for contract and tort claims under the Limitation Act 1980. It is frequently not enough. Appointments executed as deeds carry twelve-year liability, latent damage adds three years from the date of knowledge subject to a fifteen-year longstop, and construction work can reach further still. Set the term against your longest unexpired liability rather than against the regulatory floor.
Is run-off cover a legal requirement?
It depends on your regulator. RICS requires fully retroactive run-off on ceasing to practise. ICAEW requires two years under Regulation 2.8 plus all reasonable steps for a further four. The SRA makes six years an obligation of the closing firm under its Minimum Terms. The FCA expects personal investment firms ceasing regulated business to hold appropriate run-off. Unregulated consultants have no mandatory requirement, but the Limitation Act applies to them all the same.
What is a retroactive date and why does it matter so much?
It is the date before which work is not covered, regardless of when the claim arrives. It matters more than any other term on a run-off policy because a run-off wording dated from cessation covers a period in which no work was done. Run-off has to be fully retroactive, reaching back across the whole of your practice. If your current schedule shows a retroactive date later than the date you started, there is already a period no policy covers.
I am RICS regulated. Is my run-off automatic?
Partly, and the gap is the important bit. Under the RICS minimum wording, insurers provide six years of run-off for consumer claims with a £1,000,000 aggregate limit where premium or part premium has been paid, at no extra charge. Business-to-business run-off is not included and must be purchased separately. A surveying practice with commercial clients that relies on the automatic cover alone has insured only part of its exposure.
Can I skip run-off if I have never had a claim?
No, and the reasoning inverts the logic of a claims-made long tail. Professional claims routinely surface years after the work: a tax position challenged on a later enquiry, a valuation tested when a property is sold, a design questioned when a defect appears. A clean record over twenty years tells you about the claims that have arrived, not about the ones still inside the limitation period.
Does dissolving the company end my liability?
No. A dissolved company can be restored to the register under the Companies Act 2006 precisely so that a claim can be brought against it, so striking off is not a limitation defence. Separately, professional negligence can attach personally to the individual who performed the work. In Merrett v Babb the Court of Appeal held an employed surveyor personally liable to a house buyer where the firm's insurance was not available to respond.
I am selling my practice. Do I still need run-off?
It depends on what the buyer's insurer has agreed, not on what the sale agreement says. The acquired firm's policy normally ceases at completion. Either the acquirer's policy must extend to your past work with a retroactive date reaching back across it, or separate run-off must be bought. An indemnity from the buying company is only worth what that company is worth in six years' time; written confirmation from an insurer is worth considerably more.
What does run-off cover cost?
It is normally a single premium expressed as a percentage of the last trading premium, covering the whole term rather than charged annually. The figure is driven by profession and work mix, the term required, the limit of indemnity, the claims and circumstances record, and whether the closure is orderly or distressed. The largest single variable within your control is timing: terms arranged before the expiring policy lapses are materially better than terms sought afterwards.
My insurer will not offer run-off. What now?
A decline from one insurer is not the market's answer. Run-off declines are frequently structural — the insurer has exited the class or does not offer run-off beyond its own book — rather than a judgement on your firm. The route is a rebuilt submission to markets that write run-off deliberately, with the work split, largest appointments, claims narrative and retroactive history set out properly. Structural changes such as a shorter term, a higher excess or excluding a single activity can also convert a decline into terms.
What is different about run-off for IFAs?
The tail is driven by complaint rules rather than the Limitation Act. A complaint to the Financial Ombudsman Service can generally be brought within six years of the act, or if later within three years of the point the complainant knew or ought to have known they had cause for complaint — which on long-dated advice extends the realistic exposure well beyond six years. Defined benefit pension transfer advice is the hardest activity to place, and exclusions carry an additional capital resources consequence under IPRU-INV 13.
How do I find a specialist run-off broker?
Ask four questions: what retroactive date will the run-off policy carry, what term do you recommend and why, which markets write run-off deliberately rather than as an accommodation, and what happens if my incumbent declines. A specialist answers all four without hesitating and will want your expiring schedule, work split and claims record before quoting. Miller & Partner approaches every run-off placement through the Insurability Framework — underwriter intelligence, difficult risk expertise, risk assessment and claims advocacy. Call 01792 001350 or email [email protected].
About this guide
This page is general information about professional indemnity run-off cover for UK firms that are closing, retiring, selling, merging or changing legal structure. It is not advice, and it is not a recommendation to buy or hold any particular policy. Any cover described is subject to insurer acceptance, underwriting and the terms of the policy actually issued.
Regulatory requirements are summarised from published sources as at the date shown at the top of this page and change from time to time. RICS, ICAEW, SRA and FCA requirements should be checked directly against the current rules for your own firm, and Miller & Partner is not affiliated with any of those bodies. Nothing here is legal advice; limitation periods, deeds, collateral warranties and sale agreements should be reviewed by a suitably qualified legal adviser.
Merrett v Babb is referred to as an illustration of the principle that professional negligence can attach personally to an individual. The application of any authority to your own circumstances is a matter for legal advice. The interactive cover checker, gap checklist and placement assessor are general information tools only — not personalised advice, not a recommendation and not a quotation.
For our regulatory status, please see the footer of this website. To discuss a run-off placement, email [email protected] or call 01792 001350.
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John was very helpful in an area where other brokers could not find policies that met the needs of my business. Quick responses and always friendly!
I’ve been dealing with John for our specialist crime scene and biohazard cleaning insurance, and the service has been excellent. He took the time to understand the nature of our work and ensured we had the right level of cover in place. Responsive, knowledgeable, and easy to deal with throughout. Would recommend 100%
John M provided excellent support in arranging a policy suited to our needs. Despite our niche requirements, he communicated everything clearly and made the process simple. Highly recommended!
MEET THE Director
Hey, I'm John!
I started Miller & Partner with the aim to bring back personable, approachable broking to UK businesses who were tired of large corporate brokers and feeling like they were just another number.
I have built this brokerage up with no pushy sales techniques or big business tactics, just honest, approachable and professional relationships with my clients.
Over 13 years experience in business insurance
Client first approach
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Office: Vivian House, Roman Bridge Close, Mumbles, Swansea, SA3 5BG
Call 01792 001350
Email: [email protected]
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