PI run-off cover in 2026: the practitioner’s overview
Why the question exists at all
Professional indemnity is written on a claims-made basis. The policy that responds is the one in force when the claim or circumstance is notified, not the one in force when the work was done. See claims-made for the mechanics. The consequence is simple and severe: when a firm stops buying cover, the protection for everything it has ever done stops with it, even though the liability does not.
Run-off cover is the answer. It continues the claims-made protection for work already performed, for a defined period after the firm ceases to trade or ceases to carry out the insured activities. Our run-off cover entry sets out the definition and the standard features.
The five moments the decision arrives
Closure or retirement. The clearest case. The practice stops, the liabilities do not, and someone has to buy the tail.
Sale of the business. Whether the buyer assumes the liabilities depends entirely on the structure. A share purchase usually carries the corporate liabilities with the entity; an asset purchase frequently leaves them behind with the seller, who then needs run-off. This is a point to settle in the heads of terms, not in the disclosure letter.
Merger or absorption into another firm. Some professions have the concept of a successor practice, under which the acquiring firm’s policy picks up the prior work. Where that applies, separate run-off may be unnecessary; where it does not, or where the successor arrangement is disputed, a gap can open. This is one of the most common sources of confusion and it is worth establishing in writing which policy answers.
Change of activity. A firm that keeps trading but stops a regulated or specialist line still needs the tail on the work it has ceased, because the ongoing policy may exclude activities no longer carried out.
Loss of cover. Where a firm cannot obtain renewal terms, the run-off question arrives without warning and without a plan.
How long it has to run
Three separate sources set the period, and the answer is the longest of them.
Regulatory minimums. Several professional bodies specify a mandatory run-off period in their minimum terms, sometimes six years and in some regimes longer. Check the current rules for your own profession rather than relying on a figure heard elsewhere.
Contractual commitments. Appointments, collateral warranties and framework agreements routinely require cover to be maintained for a stated number of years after completion. Those promises survive the firm ceasing to trade. Building the register described in our limit-sizing framework also produces the run-off schedule.
Limitation. The realistic exposure period is set by how long a claim can still be brought. For most professional negligence claims that is measured in years from the breach or from reasonable discoverability, and in construction it can be very much longer: section 135 of the Building Safety Act 2022 inserted section 4B into the Limitation Act 1980, providing a 15-year period for Defective Premises Act 1972 section 1 claims accruing after 28 June 2022 and a 30-year period retrospectively for rights of action accrued before that date, subject to transitional protection. For practices with residential work, a standard six-year tail plainly does not match the exposure — see Defective Premises Act limitation and PI cover.
Who actually pays, and who is exposed if nobody does
Run-off premium falls due when income has stopped. That timing is the whole problem: a retiring partnership is asked to fund several years of cover out of capital, and a closing company has to find the money before distribution. Firms that plan for it treat run-off as a provision built up over the working life of the practice rather than a bill that appears at the end.
The exposure if it is not bought is not abstract. Partners in a traditional partnership are personally liable without limit for the firm’s professional liabilities, and a claim arriving three years after closure with no policy behind it lands on the individuals. Members of an LLP and directors of a limited company have more protection, but not complete protection: claims can be advanced against individuals in negligence in some circumstances, and directors face separate exposures on wrongful trading and distributions if a company is dissolved with known liabilities unprovided for. Dissolving the entity does not dissolve the risk.
What a 2026 run-off decision should look like
Start eighteen months before the event where you can. Establish the required period from the three sources above and write it down. Get the incumbent insurer’s run-off terms early, because the incumbent is usually the most straightforward route and alternatives narrow once trading stops. Notify every known circumstance before the last live policy expires, since a circumstance notified late will be looking at a run-off policy that may exclude prior known matters. Decide whether the limit should stay where it is — a run-off limit is usually a single limit for the whole period, so an aggregate that looked adequate for one year may not look adequate for six. Confirm in writing whether a successor practice arrangement exists. And record the decision, with reasoning, in the partnership or board minutes.
Where to go next
This page is deliberately an overview. For the cost side of the decision — how run-off is rated, why it is usually charged as a multiple of the last premium, and how to avoid the bill arriving as a surprise — see PI run-off cover costs. For what the cover looks like across the period and how the burden changes from year one to year six, see PI run-off cover year by year. For the definition and the standard policy features, see run-off cover in the wiki. And if a circumstance has just come to light while you are winding down, our first thirty days timeline sets out the sequence.
Frequently asked questions
Why can’t we just stop buying PI when we close?
Because professional indemnity is claims-made: the policy that responds is the one in force when the claim is notified, not when the work was done. Stop buying cover and past work is unprotected, even though liability for it continues until limitation expires. Run-off cover extends the claims-made protection for a defined period after the firm ceases trading.
How many years of run-off do we need?
The longest of three periods: any minimum your regulator sets, the longest maintenance obligation in your appointments and collateral warranties, and the realistic limitation exposure on the work you did. For firms with residential construction work the limitation position can extend well beyond a conventional six-year tail, so the contractual register is a floor rather than an answer.
If another firm takes over our practice, do we still need run-off?
It depends on the transaction structure and, in some professions, on whether the acquirer is a successor practice under the minimum terms. A share purchase generally carries the liabilities with the entity; an asset purchase often does not. Establish in writing before completion which policy will answer a claim about pre-completion work — assumptions here are expensive.
Are former partners personally exposed if run-off is not bought?
In a traditional partnership, yes — partners are personally liable for the firm’s professional liabilities without limit, and a claim after closure with no policy behind it lands on the individuals. LLP members and company directors have more protection but not absolute protection, and dissolving an entity with known liabilities unprovided for creates its own difficulties.
This page is general insurance information about how UK professional indemnity policies are commonly structured. It is not legal advice, and it is not a statement of what any particular policy covers. If a claim, a circumstance or a contract term is in issue, read your own wording and take advice on your own facts.
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This page is general information, not advice on a specific policy.