What is Run-Off Cover?

Run-off insurance is a continuation of your Professional Indemnity Insurance, designed to protect you against claims made after you’ve stopped operating or providing services.

Professional Indemnity policies are "claims-made", which means they only cover you if the claim is made while the policy is active — not when the work was originally done. So if you cancel your policy when you retire or wind down, and a claim comes in later — you won’t be covered. That’s where run-off comes in.

Why You Might Need It

Even after you stop working, a client (or third party) can still bring a claim for:

• Advice or training that caused financial loss

• Alleged errors in documents or reports

• Miscommunication or breach of contract

• Workplace issues from HR or leadership training

• Compliance issues traced back to your services

These claims could arise years after the work was completed — well after you've closed your doors.

 Real Examples:

• An accountant retires. Two years later, a client lodges a claim over an incorrect tax structuring recommendation.

• A workplace trainer closes their consultancy. Eighteen months later, their former client alleges the training contributed to a WHS breach.

With no run-off cover, you'd be legally and financially exposed — possibly having to pay legal defence and settlement costs out of pocket.

What Does It Cost?

The cost of run-off cover generally reduces over time, since the risk of a claim falls with each year that passes.

Here's a typical premium structure (based on your final PI premium before you ceased operating):

• Year 1: ~100% of last full premium

• Year 2: ~80%

• Year 3: ~60%

• Year 4: ~40%

• Year 5–7: ~20–30%

Some insurers may offer a lump sum option — for example, a 5- or 7-year run-off policy fully paid upfront. This can be more cost-effective and easier to manage for professionals wrapping up.

How Long Do You Need It?

The recommended period for run-off cover is typically 7 years, in line with:

• Statutory limitations on legal proceedings

• Industry standards and best practices

However, some lower-risk professionals may choose a shorter term (e.g. 3–5 years) if appropriate.

In Summary:

If you're ceasing your professional services, don’t leave yourself exposed. Run-off cover ensures you're protected for past work, so you can retire, sell, or close with true peace of mind.

• Covers claims made after you’ve stopped operating

• Protects your personal assets and professional legacy

• Premiums reduce over time as the risk declines

Thinking of winding down or selling your business? We can help you assess the right run-off cover for your needs — and negotiate the best structure to suit your exit plan.