Personal exposure · Partner retirement

When a partner retires — PI liability for the departing individual

Reviewed by Matthew Bartlett, Director, Apex Insurance Brokers Limited (FCA FRN 724952) · Published 14 July 2026

A partner or director retiring from a UK professional firm carries continuing PI liability for work done during their partnership. This page sets out what that liability looks like, how PI cover responds, and what to negotiate at retirement to protect the individual's personal position.

The continuing liability

Traditional partnership. Partners are jointly and severally liable for the firm's debts including PI-related liabilities. Retirement does not automatically end this — the partner remains liable for acts done during their partnership.
LLP. Members generally protected from personal liability by the LLP structure, subject to specific exceptions (fraudulent trading, statutory duties, personal guarantees). Retirement crystallises the exposure for prior acts.
Incorporated practice. Directors typically shielded by the corporate veil except for personal duties. Retirement typically severs future exposure for post-retirement acts.
Sole practitioner ceasing. Full personal exposure — the practice's liabilities are the individual's.

How PI cover responds after retirement

Firm continues. Firm's PI typically responds to claims against prior partners for work done during the partnership — provided the firm maintains PI covering the relevant tail.
Firm closes without successor. Firm's run-off cover responds to claims against retired and current partners for prior acts, up to run-off period expiry.
Firm sold/merged. Successor firm may or may not carry the retired partner's prior acts — depends on SPA structure and successor-practice rules.
Individual's personal exposure. Where the firm has closed and run-off has expired or is inadequate, individual professionals bear personal liability for the tail.

The deed of retirement / partnership agreement

The retiring partner's protection depends heavily on what the deed of retirement says.
Standard provisions to negotiate: firm's obligation to maintain PI covering prior acts of the retired partner, for a defined minimum period; indemnity from continuing partners against any claim relating to prior acts; access to firm records and correspondence for any claim response; consultation right on any settlement that could affect the retired partner personally.
Where the firm cannot or will not commit to these, the retiring partner should consider personal run-off cover.

Personal run-off cover

For individuals concerned about tail exposure independently of the firm.

Individual PI run-off cover is available in some markets, though less common than firm-level run-off.
Structured as a limited-duration policy covering the individual's acts during specified periods of practice.
Premium typically substantial — reflects the tail exposure.
Discuss with specialist broker at the point of retirement; not always available retrospectively.

Specific tail-exposure situations

Retiring solicitor from an SRA firm. Firm required to maintain six-year run-off. Deed of retirement should confirm this and reference SRA compliance.
Retiring architect from a practice with BSA-touching work. Up to 30-year tail for higher-risk-building work. Firm's run-off must last that long — not always feasible without personal cover.
Retiring IFA. DB-transfer historic advice attracts continuing FCA attention. Firm run-off must respond.
Retiring accountant from an ICAEW firm. Two-year firm run-off minimum. Prudent to extend where possible.
Retiring insurance broker. MIPRU 3 requires PI adequate to the tail; individual continues to face personal exposure without personal run-off.

Checklist for a retiring partner

Confirm the firm's ongoing PI arrangement covers your prior acts.
Confirm the deed of retirement addresses PI and indemnity from continuing partners.
Confirm the run-off cover length matches the professional-body requirement and any longer-tail work you did.
Consider personal run-off cover for any tail beyond firm run-off.
Retain access to your own records — correspondence with clients, file notes, work products — for potential future defence.
Update your address with the professional body and PI insurer so notifications can reach you.

Frequently asked

Am I personally liable for professional negligence claims after I retire from a partnership?

In a traditional partnership, potentially yes for acts done during your partnership, subject to the deed of retirement provisions. In an LLP, generally protected except for specific exceptions. In an incorporated practice, generally protected by the corporate veil for past acts subject to statutory duties.

Does the firm's PI insurance continue to cover me after I retire?

Typically yes, provided the firm maintains PI cover for the relevant tail. The firm's policy responds to claims against prior partners for work done during their partnership. Confirm this at retirement and require the firm to maintain adequate cover.

What is a deed of retirement and what should it say about PI?

The deed of retirement is the formal agreement recording a partner's departure from the partnership. On PI, it should require the firm to maintain cover for the retired partner's prior acts for a defined period, indemnify the retired partner against claims relating to prior acts, and grant the retired partner access to records and consultation on any settlement.

Can I buy personal run-off cover if the firm's cover is inadequate?

Sometimes. Individual PI run-off cover exists in some markets but is less common than firm-level cover. Discuss with specialist broker before or at retirement; retrospective personal cover is difficult.

How long does the SRA require run-off cover after firm closure?

Six years mandatory from cessation of practice. Longer is prudent for firms with higher-tail work (conveyancing, BSA-touching matters).

Does the corporate veil protect me completely after retiring from an incorporated firm?

For most professional negligence claims yes, for prior acts done as a director. Exceptions: statutory personal duties (breach of trust, fraud, misfeasance), personal guarantees, and specific regulatory investigations that pierce the veil.

What about my personal tax on run-off cover premium?

If the firm funds the run-off, it's a firm expense. If a retiring partner personally funds it, the tax treatment depends on the retiree's circumstances; discuss with tax adviser. HMRC generally treats PI premium as deductible for continuing professional activity.

If the firm cannot afford run-off cover, what are my options?

Options include: negotiate with continuing partners to fund it; take a portion of your capital account and use it to fund personal run-off; escrow arrangement funded from firm assets; last resort, accept the personal tail exposure. This is a serious commercial and legal negotiation.

What might your PI premium look like?

A guideline range built from the premiums insurers have actually quoted on risks we handle. Pick your profession and enter a few details — it updates instantly.

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Annual fee income — gross, last 12 months

Limit of indemnity

Any claims history?

Any higher-risk work? — e.g. large or overseas projects

Guideline range — this is not a quote

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How these figures are produced

This guide is built from Apex's own market data: the premiums insurers have actually quoted and charged on professional indemnity risks we have handled. Each night that data is aggregated into anonymised rate bands by profession, fee income and limit of indemnity. No client information is published — a band only appears where it contains at least five separate records, and unusually high premiums are excluded so a single atypical risk cannot distort the guide.

The range shown spans the typical spread of recent market outcomes for similar risks. Individual quotes can fall outside it in either direction. Figures exclude insurance premium tax at 12%.

This calculator is not a quote and is not an offer of insurance or advice. Your actual premium depends on full underwriting of your business, including your activities, claims record and insurer appetite at the time.