What is run-off cover? What is run-off cover?

What is run off cover?

Run off cover is a special type of insurance designed to protect you from claims made against you after you’ve retired, or sold or closed your business.

Another name for it is ERP, or extended reporting period, and it’s an extension you can add onto any claims-made policy, such as professional indemnity, medical malpractice, directors’ and officers’ or cyber insurance.

Why might I need run-off cover?

If you provide advice, expert services or medical care you may benefit from this type of insurance. This includes medical professionals, consultants, architects, accountants and other executives who could potentially face claims for their past work.

Run-off cover can protect against legal claims that might arise from advice, guidance or expertise you provided while you were still working.

It may help to cover any associated legal costs if a third party accuses you of professional negligence, including mistakes or disputes arising from the care or services you provided.

How does run-off cover work?

Run-off cover will last for a set number of years after you retire, sell or close your business. It kicks in once you’ve notified your broker or insurance company that you are no longer working.

In the event a third party makes a claim after you’ve stopped working, the run-off cover is activated to support you to deal with it.

How much does run-off cover cost?

How much run-off cover will cost you depends on the cover you choose and the services you offer.

Your profession, the size of your business and the level of risk associated with your work may also be factors in the cost.

How do I transition from active cover to run-off cover?

Your current professional indemnity, medical malpractice and directors’ and officers’ policy might include an option for run-off cover. If not, you may want to consider a separate run-off policy.

Once you know when you’re going to retire, sell or close your business, you’ll need to inform your insurer or broker.

If you're buying run-off cover, it’s important that there's no gap between when your original policy ends and the run-off cover begins.

Once you've completed a quote, you'll be able to view a summary of cover. Please always refer to your policy documents for full details around exclusions, terms and limits of your customised cover. Read our guide to understanding your policy documents.

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