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Professional indemnity explained
Run-off cover for engineers is professional indemnity insurance that keeps responding to claims about past design and advice after a consultancy closes, retires or merges. It matters because claims about building work can arrive many years after completion.
Part of: Professional indemnity insurance
In short
Run-off cover for engineers keeps professional indemnity insurance in place after a practice closes, retires or merges, so claims made later about past work have a policy to respond. Engineers' PI is claims-made, so a lapsed policy usually means no cover. There is no regulator run-off rule for engineers generally, so the term is set by limitation periods (6 years in contract, 12 for deeds), collateral warranty obligations, and the Building Safety Act 2022, which extended Defective Premises Act claims to 15 years, or 30 years retrospectively. Fire safety exclusions usually carry over into run-off.
Usually, yes. Engineers' professional indemnity insurance is almost always written on a claims-made basis: the policy that responds is the one in force when a claim is first made, not the one in force when the design was done. If a consultancy closes, a sole practitioner retires or a firm is absorbed into another business and the old policy simply lapses, a claim made later about past work may have no policy to respond to. Run-off cover fills that gap by keeping cover in place for claims about work done before the practice stopped.
Unlike solicitors or chartered surveyors, engineers in general have no single regulator that sets a mandatory run-off period. The length of cover you need is usually driven by three things: the limitation periods that apply to your work, the contracts, deeds and collateral warranties you signed, and the type of projects you worked on. For structural, civil and building services engineers working on residential buildings, the Building Safety Act 2022 has made the last of these much more important.
See our engineers' PI guide for how live cover works before you reach the point of closing.
The table below summarises the main time limits under the Limitation Act 1980 and the Building Safety Act 2022, section 135. Each one is a reason run-off may need to last longer than people expect.
| Type of claim | Usual time limit | Runs from |
|---|---|---|
| Breach of a simple contract | 6 years | The breach |
| Contract or appointment signed as a deed | 12 years | The breach |
| Negligence (tort) | 6 years, or 3 years from knowledge for latent damage | The damage, subject to a 15 year longstop for latent damage |
| Defective Premises Act 1972, section 1 (dwellings), right accrued on or after 28 June 2022 | 15 years | Completion of the work |
| Defective Premises Act 1972, section 1, right accrued before 28 June 2022 | 30 years (retrospective) | Completion of the work |
Section 135 inserted a new section 4B into the Limitation Act 1980. For claims under section 1 of the Defective Premises Act 1972, which covers work in connection with the provision of a dwelling, the old six year period became 15 years going forward and 30 years for rights that had already accrued. Our guides to the section 135 extension, latent damage and how long a client can sue go into more detail.
Many engineering appointments on development projects are signed as deeds and come with collateral warranties to funders, purchasers and tenants. Those documents often contain a clause requiring you to maintain PI cover for 6 or 12 years after practical completion, sometimes at a stated limit and subject to commercially reasonable rates. That obligation does not end because your business closes. Our page on whether PI must be kept for 6 or 12 years after completion explains how these clauses are commonly read.
On a merger or acquisition, the options usually are:
See PI in professional firm mergers and collateral warranties and PI.
Run-off cover is commonly written on the same terms as the last live policy, so any restriction on that policy is carried forward. For engineers who worked on residential or multi-storey buildings, the restrictions that matter most are usually:
Because the 30 year retrospective period applies to rights that accrued before June 2022, a firm can face claims about buildings designed in the 1990s and 2000s. If the run-off policy excludes fire safety, those claims may be uninsured. Read fire safety and cladding exclusions in PI and the 30 year run-off horizon before choosing a run-off term.
Illustrative example 1: retirement. A sole structural engineer retires and closes their limited company. Eight years earlier they signed a deed of appointment for a block of flats. A claim alleging defective design arrives four years after retirement. Without run-off the claim would usually go uninsured; with run-off at a suitable limit, the run-off insurer would consider it subject to the policy terms.
Illustrative example 2: acquisition. A small building services consultancy is bought by a larger firm. The buyer's insurer agrees to cover past work, but excludes one hospital project with a known issue. The seller keeps a separate run-off policy to cover that project.
Illustrative example 3: fire safety aggregate. A façade engineer closes with run-off on the same terms as their last policy, which included a fire safety aggregate. Two claims about different buildings are notified in the same period and share that single aggregate limit.
Before you close, gather your list of deeds and warranties, the project history including any work on buildings of 11 metres or more, and your claims record. Our run-off cost drivers page explains what insurers consider, and retiring from practice covers the wider checklist.
Apex arranges professional indemnity insurance and run-off cover for engineering firms; a broker reads every enquiry.
There is no single regulatory figure for engineers. Many firms look at six years as a minimum, twelve years where they signed deeds, and longer where they designed residential buildings caught by the Building Safety Act's extended limitation periods. Your contracts and warranties set the floor; your project history sets the risk.
Sometimes, but it is harder. Insurers usually want continuity and may be cautious about a gap. Any claim made during the gap would generally not be covered. Arrange run-off before the live policy ends so there is no break in cover.
Most engineers' PI policies cover the firm and its principals and employees for work done on the firm's behalf, and run-off usually continues that, subject to the policy terms. Check how the run-off wording defines who is insured, especially after a company is dissolved.
Only if the policy does. Run-off is commonly written on the same terms as the last live policy, so a fire safety or cladding exclusion, or an aggregate fire safety limit, usually carries across. Ask your broker to confirm the position before you choose a run-off term.
Both are possible. Some insurers offer a single premium for several years; others renew run-off annually. Annual renewal keeps flexibility but carries the risk that terms change or cover becomes harder to find later.
Tell us what your business does, your turnover and any claims. A broker reads every enquiry and comes back with options. No fee for a quote. Or call 0117 325 0027.
Get a PI quote Request a callbackApex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances, and it does not guarantee that cover will be available or on what terms.
