The ARB does not strictly require architects to buy run-off cover when a practice closes — and yet not buying it is one of the costliest professional decisions a retiring architect can make.
This is a quirk of the architects’ regulatory regime. Solicitors are obliged to put six years of run-off in place under the SRA Minimum Terms and Conditions before they close. Surveyors face a similar discipline under RICS rules. The Architects Registration Board, by contrast, does not impose a hard run-off duty on practices that cease trading. But the underlying liabilities — in tort, in contract, under the Defective Premises Act 1972 and in many cases under the Building Safety Act 2022 — keep running long after the office has been emptied. Closure of the business does not close the exposure. This guide explains why run-off is functionally compulsory even when the regulator has not made it formally so, and how to buy it well.
The first thing to understand is what happens at closure. A professional indemnity policy is written on a claims-made basis. It only responds to claims notified during the policy period. When the practice ceases to trade and stops renewing its annual policy, every future claim relating to past work is uninsured unless run-off cover has been arranged. The original work might have been signed off twenty years ago. The claim might land tomorrow. Without run-off, the partner or director who personally signed the appointment is exposed to their own assets.
The exposure has three sources. In contract, claims can run for six years from breach under section 5 of the Limitation Act 1980, or twelve years if the appointment was executed as a deed under section 8. In tort, the clock can run from the date of damage and may be extended under section 14A of the Limitation Act 1980 where the damage was latent, capped by the fifteen-year longstop in section 14B. Under section 1 of the Defective Premises Act 1972 — which imposes a duty to see that dwellings are built fit for habitation — limitation has been radically extended by the Building Safety Act 2022. Section 135 of that Act stretched the DPA limitation period to 30 years for historic claims and 15 years prospectively. Architects who signed off dwellings in the 1990s and 2000s are now facing live claim windows they had assumed were long closed.
ARB’s silence on mandatory run-off does not mean ARB is indifferent. Standard 8 of the Architects Code requires “adequate and appropriate” cover, and ARB guidance is clear that when a registered architect ceases practice they are expected to take “reasonable steps” to ensure that their former clients remain protected. In practice that means run-off in all but the most marginal cases. The contrast with the SRA’s six-year mandatory run-off regime simply means the discipline falls on the architect and broker rather than the regulator.
Sole practitioner risk is the sharpest version of the problem. If a sole practitioner retires, dies, or is incapacitated, there is no continuing entity to renew the annual policy. Run-off has to be bought at closure as a single multi-year commitment. The market typically offers six-year run-off as standard, with extensions to twelve, fifteen, or longer available subject to underwriting. Where the practice has signed dwellings, the run-off limit and term need to reflect the BSA tail, not the six-year market default.
Run-off cover is structurally identical to a live PI policy — claims-made, retroactive to the original date of cover, civil liability wording, defence costs in addition or within the limit depending on market — but with no new work being added to the exposure. The policy responds to claims notified during the run-off period that relate to professional services performed before closure.
The mechanics matter. The retroactive date should match the date the original practice first took out PI cover. If a retiring sole practitioner had been on consecutive policies since 1998, the run-off retroactive date should read 1998, not the date the run-off was incepted. Insurers occasionally try to reset this; the broker’s job is to push back.
The limit of indemnity in run-off should reflect the highest commitment made by the practice during its trading life — particularly the highest contractual obligation under any collateral warranty or deed of appointment still within the relevant limitation window. A retiring practice that committed to £5,000,000 of cover under its last large commercial scheme cannot meaningfully run off at £1,000,000.
Aggregate vs each-and-every-claim is a critical distinction in run-off. Many run-off policies are written in the aggregate over a multi-year period. If two claims arrive in year three, they share a single limit. Brokers should price the alternative of an annually-reinstated structure and present the trade-off honestly.
For partnerships and LLPs, run-off needs to be considered against the underlying entity structure. An LLP that has been dissolved still has former members whose personal exposure under contracts signed in the LLP’s name is governed by the limitation regime above. The Third Parties (Rights against Insurers) Act 2010 allows a third-party claimant to proceed directly against the insurer if the original insured entity has been dissolved — but only if there is a policy in force, which in practical terms means run-off.
Consider a sole practitioner architect who has run a practice in Yorkshire for 28 years and is retiring at 67. The practice’s last three years of work have been £400,000 of residential extensions, refurbishments, and two new-build dwellings. The most recent appointment was a £4m new-build executed as a deed.
The retiring architect’s broker arranges a 15-year run-off at £2,000,000 each and every claim, retroactive to 1996 when the practice first took out PI. The premium for the 15-year package is paid up front from the retirement drawdown. The architect retains digital copies of every project file in cloud storage with multi-year retention.
Eleven years into retirement, a claim is notified relating to a 2014 residential refurbishment where a structural alteration is alleged to have contributed to subsequent settlement. The claim falls within section 1 of the Defective Premises Act 1972; the limitation tail has been extended by Building Safety Act 2022 section 135. The run-off policy responds, defends the matter, and settles at £140,000 inclusive of costs. Without run-off, the architect would have funded the entire defence and settlement personally.
Apex’s view: The architects’ market is the only major UK professional sector where run-off is not regulator-mandated, and that is the single most dangerous feature of the regime. We continue to see retiring sole practitioners who have been advised that six-year run-off “matches what solicitors do” — without anyone testing whether their last decade of dwellings work sits within Building Safety Act 2022 reach. For any architect retiring with residential work in the back catalogue, the working assumption should be 15-year run-off as a minimum, with a limit set to the highest live contractual commitment. The cost of run-off is finite. The cost of not having it, when a claim lands seven years into a six-year tail, is not.
Apex Insurance Brokers serves UK professional services firms and commercial businesses. Call 0117 325 0027, email hello@apexinsurancebrokers.co.uk, or request a quotation.
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