Run-off cover is a type of insurance that kicks in after you stop working, retire, or sell your business. Run-off cover extends a claims-made insurance policy, protecting you against claims that arise from past work, even when you are no longer operating. 

It’s most often used with Professional Indemnity Insurance, which only responds to claims made during the policy period. Without run-off, you could be left exposed if a client brings a claim months or even years after your last job. 

Run-off can usually be arranged as an annual policy or paid up-front for multiple years. It has a step-down premium calculation, with a rough indication being that for 7 years of run-off cover, the premium will be around 4 times your last insurance premium. For example, your final year premium is $2,000. To obtain 7 years of run-off coverage, the premium will be approximately $8,000. If only one year of run-off cover is required, the premium is generally the same as your final year’s premium, which in this case would be $2,000.

** Note that each insurer operates differently and may offer amounts that differ from the indicated amount. ** 

Run-off is a smart way to protect your legacy and financial position once you step away from your business. To learn more about run-off insurance, please visit our dedicated page.