Written by Michael Foote, Insurance Expert
Michael Foote is the founder of Quote Goat and has over 20 years experience working in finance & insurance. Since launching Quote Goat he has appeared on TV as well as many of the largest online publications including Forbes, The Telegraph and The Metro. Prior to Quote Goat, he worked in finance in the city.
What Is Run-Off Cover?
Run-off cover is professional indemnity insurance that protects you after you stop trading. It covers claims made against work you completed while your business was active, even though you’re no longer working.
Because PI insurance operates on a “claims made” basis, you’re only covered if a valid policy is in force when someone makes a claim against you. This applies regardless of when you actually did the work.
If you retire or close your business without run-off cover in place, your past work becomes completely uninsured. Claims can surface years after a project ends. A client might discover an error, defect, or alleged negligence long after you’ve stopped working, but you still need cover at the point they make the claim.
When Do You Need Run-Off Insurance?
You need run-off insurance if you’re:
- Retiring from your profession
- Closing or winding up your business
- Selling your business and the buyer isn’t taking on your historic liabilities
- Changing careers or stepping away from regulated work
- Stopping a particular service that required PI cover
Professions with long-tail risk face particular exposure. Architects, solicitors, accountants, surveyors, engineers, and consultants often deal with claims that emerge years after the work was delivered. A structural design fault, incorrect tax advice, or conveyancing error might not become apparent until well after you’ve left the profession.
Some professional bodies have specific run-off requirements:
- RIBA (Royal Institute of British Architects) typically requires architects to maintain run-off cover for six years minimum
- SRA (Solicitors Regulation Authority) mandates run-off insurance for solicitors
- ICAEW (Institute of Chartered Accountants in England and Wales) recommends specific run-off periods for accountants
Check your regulator’s rules before you stop trading.
How Long Should You Hold Run-Off Cover?
The minimum period depends on:
Your regulatory body’s requirements: Some mandate six years; others recommend indefinite cover where affordable.
The statutory limitation period: In the UK, most claims must be brought within six years of the breach occurring, or three years from when it was discovered (subject to a longstop).
The nature of your work: Structural work, planning advice, and financial services can face claims beyond six years, particularly where latent defects are involved.
Most professionals hold run-off cover for six to seven years as a baseline. Those with higher-risk work or regulatory obligations may need longer. If you want to understand how PI policies handle historic work, read more about when professional indemnity insurance covers past work.
How Much Does PI Run-Off Cover Cost?
Run-off premiums are typically lower than active trading cover because you’re not taking on new work. However, the risk of historic claims remains, so it’s not a token cost.
Year one: Premiums usually stay close to your last active year.
Subsequent years: Costs often reduce annually, assuming no claims.
Prepayment options: Many insurers let you pre-pay for multiple years at a discount (often 10-20% cheaper than annual payments).
The exact cost depends on your profession, claims history, turnover in your final trading years, and the level of cover you need. For typical costs across different professions, see how much professional indemnity insurance costs in the UK.
What Happens If You Don’t Buy Run-Off Cover?
If a claim comes in after you’ve stopped trading and you have no run-off insurance:
- You’re personally liable for legal defence costs and any damages awarded
- You may face regulatory sanctions if your professional body required you to hold cover
- Your personal assets, including savings and property, could be at risk
- Your professional reputation may suffer, even in retirement
For more on the consequences of going uninsured, see what happens if you don’t have professional indemnity insurance.
Real-World Example: Why Run-Off Cover Matters
A structural engineer retires in 2023 and cancels their PI policy. In 2025, a homeowner claims that the engineer’s basement design from 2022 caused subsidence and water ingress. They issue proceedings for £80,000 in damages.
Because the engineer has no run-off cover in place when the claim is made, they’re personally liable for legal costs and any settlement. Even if the claim is eventually dismissed, defence costs alone could run into tens of thousands of pounds.
This scenario isn’t hypothetical. Claims against past work are common, particularly in construction-related professions where defects take time to emerge.
Do All Professionals Need Run-Off Cover?
Not everyone needs it, but most professionals who carried PI insurance while trading should seriously consider it.
You’re at higher risk if your work:
- Involved design, specification, or structural elements
- Included advice that could lead to financial loss
- Dealt with contracts, property transactions, or compliance matters
- Exposed clients or third parties to potential harm or loss
If your work was low-risk, short-term, and involved no ongoing liability, you may be able to forego run-off cover. However, this is a decision best made with professional advice.
How to Arrange Run-Off Cover
Most insurers who provide standard PI cover also offer run-off policies. You typically arrange it before your active policy expires.
Key steps:
- Contact your current PI insurer at least 60 days before you stop trading
- Confirm the minimum run-off period required by your regulator
- Decide whether to pay annually or pre-pay for multiple years
- Check the policy wording carefully, particularly around retroactive dates and cover limits
- Don’t let your current policy lapse before run-off cover starts
Key Points to Check in Your Run-Off Policy
Retroactive date: Your run-off policy must cover work done during your entire trading period. Check the retroactive date matches when you first started working.
Cover limit: Your run-off limit should match what you held while trading, unless your regulator allows otherwise.
Extension provisions: Some policies allow you to extend run-off cover if claims emerge near the end of your coverage period.
Prepayment terms: If you pre-pay for multiple years, confirm whether you can get a refund if you die or become permanently unable to face claims.
Run-Off Cover for RIBA Architects
RIBA members face specific run-off requirements. The RIBA mandates that architects maintain run-off cover for at least six years after ceasing practice. This reflects the long-tail nature of architectural liability, where defects in design or specification may not become apparent for years.
Architects working on complex projects involving basement works, structural alterations, or listed buildings face particularly long exposure periods. Claims can arise well beyond the standard limitation period in cases involving latent defects.
Final Thoughts
Run-off cover protects you from claims that can appear years after you’ve closed your business. It’s not optional if you want to safeguard your personal finances and comply with professional regulations.
If you’re retiring, selling up, or stepping away from professional work, arrange run-off cover before your current policy ends. Leaving a gap could mean facing a claim with no insurance in place.
Ready to protect your past work? Use the button on screen to get a professional indemnity insurance quote tailored to your situation.
