Protecting your reputation and legacy after your firm stops trading
For any business that provides a professional service, Professional Indemnity Insurance (PI) is an essential safeguard — protecting your business from the financial and reputational fallout of client claims.
But what happens when your firm closes, merges, or you retire from practice?
Your professional liability doesn’t end when your business does, and without continued protection, you could face claims for work carried out years ago. That’s why Run-Off Professional Indemnity Insurance is vital.
What is Run-Off Professional Indemnity Insurance?
Run-Off Professional Indemnity Insurance (often called Run-Off PI Cover) provides ongoing protection for work completed before your firm ceased trading.
Unlike other types of insurance, PI operates on a claims-made basis – meaning it only covers claims made and reported while the policy is active.
If you cancel your PI policy when your firm closes, you’ll have no cover for future claims relating to past work. Run-off insurance ensures that your previous projects, advice or services remain insured long after you stop trading.
Why professional firms need run-off PI cover
Claims against professional service firms can surface many years after the work was completed.
For example:
- An accountant could face a claim for historical tax advice or audit work.
- An architect might be accused of a design error long after project completion.
- A surveyor could be held responsible for a valuation that later proves inaccurate.
- A management consultant might receive an allegation of negligent advice from a past client.
Even a single claim can involve substantial legal costs and potential damages. Without run-off professional indemnity insurance, these liabilities could fall on former partners, directors or shareholders personally — with serious financial consequences.
Regulatory and contractual requirements
Many professional bodies and regulators require firms to maintain run-off professional indemnity cover after ceasing practice.
RICS mandates at least six years of run-off cover for surveyors.
ICAEW and other accountancy bodies require members to hold a similar minimum period.
Architects, solicitors and financial advisers are also subject to strict run-off rules.
Even when not compulsory, clients, investors or acquirers often insist on proof of run-off insurance during business sales or mergers. Maintaining cover is not just about compliance — it’s a mark of professionalism and responsibility.
How long should you maintain Run-Off cover?
The appropriate duration depends on your profession and exposure.
Six years is the standard period for most professions, reflecting the limitation period for contractual claims under UK law.
Up to 12 years may be advisable for firms with exposure to latent defects or work completed under deed.
Some insurers offer multi-year run-off policies that provide long-term certainty at a fixed premium, while others offer annual renewals that decrease in cost as claim risk reduces over time.
How run-off PI premiums are calculated
Run-off premiums are typically based on a percentage of your final full trading year’s PI premium.
Premiums usually reduce each year as the likelihood of new claims diminishes. While it may seem tempting to cancel cover after closing, the potential cost of one uninsured claim could far outweigh several years of premiums.
Maintaining Run-Off PI Insurance should be viewed as an integral part of your professional exit strategy and risk management plan.
Run-Off cover during mergers, sales or restructures
When a professional firm sells, merges or changes legal structure, historical liability must be clearly addressed.
If the purchasing firm assumes responsibility for past work, they must ensure their PI policy includes retroactive cover.
If not, the outgoing entity must arrange run-off professional indemnity insurance to protect against future claims.
Failing to clarify these responsibilities can create dangerous gaps in cover — exposing both firms to uninsured risks and regulatory breaches.
Why choose Champion Professional Risks
At Champion Professional Risks (part of Champion Insurance Group), we specialise in arranging Professional Indemnity Insurance for professional service firms across the UK — including:
- Accountants and auditors
- Architects and engineers
- Chartered surveyors and property professionals
- Management and IT consultants
- Solicitors and financial advisers
Our team has deep expertise in the regulatory requirements and commercial realities of the professional services sector.
We can help you:
- Assess your ongoing liability after closure, merger or retirement
- Determine the right level and duration of run-off cover
- Navigate compliance with your professional body
- Negotiate competitive premiums with leading UK insurers
- Our goal is to ensure your professional reputation — and the firm you’ve built — remains protected long after trading ends.
- Protect your professional legacy
After years of serving clients and building trust, the last thing any professional wants is to face a claim with no cover in place.
With Run-Off Professional Indemnity Insurance, you can step away from your business with confidence – knowing your work, your reputation, and your personal finances remain protected.
To discuss tailored run-off cover for your firm, speak to Champion Professional Risks today:
📅 Schedule Appointment (Teams)
📞 03330 430 430 (option 1)
📧 Profin@ChampionInsure.co.uk
