Run-Off Insurance
Run-off cover is a type of liability insurance held within a Professional Indemnity policy which provides cover for work done by a business in the past.
We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!
Run-off cover protects a business from claims of negligence or loss resulting from services provided while it was previously operating. Such insurance is underwritten on a ‘claims made’ basis (only covers claims made while the policy is in force, regardless of when the act took place), meaning even though the business is no longer in operation, it must continue to hold run-off cover in case a claim is lodged at some time in the future.
Is it necessary?
Professional Indemnity Insurance covers business professionals against claims of negligence due to an alleged omission, act or breach of professional duty. This could include providing inaccurate information or failing to perform a service adequately, with the result that their client suffers a loss.
And while most professionals hold Professional Indemnity Insurance over the lifetime of their business, because claims can be made retrospectively even after they have retired or their business has closed, PI Insurance including run-off cover remains a necessary cost they must continue to bear.
What will it cost?
Run-off cover will initially cost roughly the same as normal Professional Indemnity Insurance in the first year after the business closes and the run-off period begins. After that, the longer the business has been closed, the less run-off cover will cost, although it will take several years to reduce significantly, given that from the insurer’s perspective, there is still a high chance of a claim during this time.
Six years is considered to be the minimum time run-off cover should be maintained for, as this is the time limit for lodging a claim under both breach of contract and tort law, although circumstances will differ with each business.
Compare professional indemnity insurance
Get quotes online Speak to a broker

Am I eligible?
To be eligible to purchase run-off cover, the previous business must be no longer operating. Many insurers will also only provide run-off cover to existing clients who have held Professional Indemnity Insurance with them in the past.
Can sole traders get cover?
Sole traders can purchase run-off cover and need to do so more than most. This is because if one partner in a normal business retires, the Professional Indemnity Insurance is usually maintained by the remaining partner to protect the business. But being an only practitioner, a sole trader closing their business would need to continue protecting themselves, even after retiring.
Picture:Shutterstock
More guides on Finder
-
Travel insurance for over 70s
Over 70 and need travel insurance? Compare your options to get affordable cover for what matters.
-
Travel insurance for seniors over 80
Travel insurance is an essential expense for anyone planning a trip overseas, though sometimes it can be difficult to find cover if you are over 80 years of age.
-
Here’s how crypto savings accounts are taking on the banks
SPONSORED: A new generation of fintechs are offering Australians more yield on their capital.
-
Trekking travel insurance
Trek confidently with one of these 10+ brands that offer trekking insurance.
-
Finder “Peace Koalas” NFT Project Terms and Conditions
The Finder "Peace Koalas" NFT Project is a collection of digital artworks (NFTs) running on the Ethereum network.
-
Private health insurance tax guide
If you just turned 31 or have started earning over $90k, you'll want to think about taking out health insurance now.
-
Travel insurance & COVID: What do credit cards cover (and miss)?
Not all credit card travel insurance policies are created equal.
-
Sickness and accident insurance
Looking to protect your income in case of a serious accident or illness? Consider getting combined sickness and accident insurance.
-
Life insurance news
Stay on top of news and developing trends in the Australian life insurance industry.
-
Travel insurance COVID: Does it cover hotel quarantine?
We researched 37 policies and discovered travel insurance can cover COVID hotel quarantine, but there’s one major exception.
Ask an Expert