A surveying firm that signed off residential work in 2010 can still be sued in 2040. The six-year run-off most partners assume will see them out was designed for a different statute book.
Run-off cover is the professional indemnity policy that responds to claims notified after a firm has stopped trading. For surveyors the rules are set by RICS, the duration is at least six years on the minimum approved wording, and the buyer’s instinct is to treat it as a closing tax on retirement. That instinct is now badly out of date. Section 135 of the Building Safety Act 2022 retrospectively extended the Defective Premises Act 1972 limitation period to 30 years for residential work completed before 28 June 2022, and to 15 years for work completed after that date. Any practice that certified, monitored, valued, or inspected residential dwellings is now sitting on a tail that the standard six-year run-off no longer matches. This guide explains the exposure, the RICS requirements, and the commercial choices a closing or merging practice has to make.
The traditional run-off conversation went like this: the practice closes or the sole principal retires; RICS requires six years of run-off on the minimum approved wording; the closing partners pay the premium, usually as a 250% to 300% multiple of the last full-year premium spread across the six years; the run-off lapses after six years and the partners are clear.
The 30-year tail problem rewrites that conversation for any firm with residential exposure. A surveyor who valued a flat in a residential block in 2008, or who acted as employer’s agent on a residential development in 2012, can face a claim under section 1 of the Defective Premises Act in 2038. The Limitation Act 1980’s standard six-year contract limitation does not apply to DPA claims; section 135 of the Building Safety Act 2022 sets the limitation period at 30 years retrospective and 15 years prospective. Claimants do not need to show that the firm was on notice of the defect; they need to show that the dwelling was not fit for habitation as completed.
For a practice closing today, the question is therefore not “how much run-off does RICS require?” — it is “what is the longest-tail exposure on the back-book?”. For a residential project monitoring or employer’s agent practice, that exposure can run 30 years from the date of completion. Six years of run-off is approximately one-fifth of the period during which claims may still be brought.
The RICS minimum requirement is six years on the minimum approved wording from a qualifying insurer. Some insurers offer 6 + 6 structures, optional renewals, or step-down limits. The market for surveyors’ run-off has hardened materially since 2021; not every primary insurer will offer extended run-off, and not every closing practice can secure cover beyond the six-year minimum at any price.
Run-off cover is a continuation of the claims-made trigger. A claim notified within the run-off period, arising from work done during a prior period of insurance, falls within cover subject to the wording, the limit, and any endorsements that were in force at the time of the original work or at the time of notification (depending on the policy structure).
Three structural features matter:
Where the run-off policy has a fire safety endorsement, that endorsement applies to the back-book in the same way it applied to live work. A practice that closed in 2024 with a fire safety endorsement carries the same exclusion on residential claims notified in 2030 as it did on live work in 2024. This is a particularly hard point for practices that did not have fire safety exposure during their working life but find themselves wanting cover for it now.
Section 11 of the Insurance Act 2015 can do useful work in run-off. Where an insurer seeks to refuse a run-off claim on the basis of a technical breach of a procedure condition — for example, a notification timing argument — the insured can rely on section 11 to require the insurer to show that the breach actually increased the risk of the loss. In practice, run-off insureds have less leverage at the moment of dispute than live insureds, so the wording at inception is where the protection has to be built in.
A four-partner residential and commercial surveying practice closes in 2026. The practice has been continuously insured back to 1998, with a current limit of £3m each-and-every and a £25,000 deductible. The book is roughly 40% residential building survey and homebuyer reports, 20% residential project monitoring, 30% commercial valuation, and 10% expert witness. Last full-year premium was £42,000.
The qualifying insurer offers six-year run-off at a multiple of 270% of the last full-year premium — £113,400 — payable up front. An alternative quotation offers 6 + 6 run-off (six years primary, six years optional extension if the original insurer still writes the line at year six) at 320% of last full-year premium for the primary six years plus pricing to be confirmed at year six. The partners take the 6 + 6 structure because the residential project monitoring exposure has a 30-year tail running from completion dates between 2014 and 2024, and the partners want optionality.
In 2034 a claim arises under section 1 of the Defective Premises Act on a residential block monitored in 2019. The pleaded loss is £1.6m. The run-off policy is in its eighth year. The fire safety endorsement in force at the time of work excludes external wall system claims on relevant buildings; the pleaded case is for inadequate inspection of foundation and structural elements, which falls outside the endorsement. The claim is settled at £900,000 within the policy limit. Without the year 7-12 extension, the firm would have been bare.
Apex’s view: For any surveying practice with residential exposure, six years of run-off is no longer a complete answer. We advise closing partners to budget for 12 to 15 years of run-off as a working assumption, and to treat the 30-year tail under section 135 of the Building Safety Act as the live constraint until the market produces a workable longer-term product. The market today is not generous on extended run-off — the time to negotiate it is at first inception of the run-off policy, not at year six when the practice is dissolved and the partners are dispersed. If you are within five years of closure and have any residential back-book, structure the run-off now.
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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