Run-off cover vs extended reporting period: the difference
Reviewed by Apex Insurance Brokers · Last reviewed 2026-08-05
Professional indemnity (PI) insurance is written on a claims-made basis. That single fact drives everything on this page. A claims-made policy only responds to a claim that is first made against you and reported to insurers during the policy period — not when the work was done. So if you retire, sell, merge or simply stop doing the insured activity, and a client complains 18 months later, your last live policy has already expired. Nothing responds. That gap is the "tail", and there are two established ways to close it.
What run-off cover is
Run-off cover is a distinct PI policy taken out when a business (or an individual's involvement in it) ceases the insured activity. It insures you against future claims arising from work already completed. No new work is covered because there is no new work — the point is purely to keep the door open for latent claims.
Run-off is typically arranged and renewed annually for a run of years. For many professions six years is a common benchmark, and some regulators make it mandatory. Solicitors closing a firm must arrange six years' run-off under the SRA's Minimum Terms and Conditions; RICS-regulated surveyors and many accountancy bodies impose similar run-off requirements when a firm ceases. Even where no regulator compels it, a limitation period means claims can surface years after the event, so run-off is the prudent default.
What an extended reporting period is
An extended reporting period — also called a discovery period, reporting extension or "tail" endorsement — is not a new policy. It is an extension to your existing (usually final) claims-made policy. It gives you extra time to report claims to those insurers, provided the alleged act, error or omission occurred before the policy expired.
An ERP is usually short and fixed: some policies grant a brief automatic reporting window (for example 30, 60 or 90 days) at no extra cost, and many let you purchase a longer period. Crucially, an ERP normally does not provide a fresh limit of indemnity. Claims reported during the extension draw down the same aggregate limit that applied in the final policy year. If that limit is eroded, later claims may find little or nothing left.
The core differences at a glance
| Run-off cover | Extended reporting period | |
|---|---|---|
| What it is | A standalone PI policy | An extension bolted to an existing policy |
| Duration | Ongoing, renewed annually (often six years or more) | A fixed window (days or months) |
| Limit of indemnity | A fresh limit each policy year | Shares the final policy's aggregate limit |
| Terms can change | Yes — re-underwritten at each renewal | No — frozen on the expiring wording |
| Typical use | Ceasing to trade, retirement, sale, closing a firm | A short gap, or where the market withdraws cover |
| Regulatory fit | Often mandated (e.g. SRA, RICS) | Rarely sufficient on its own for mandated cover |
The practical headline: run-off is the more robust, longer-lasting solution because it renews and gives you a fresh limit each year. An ERP is a lighter-touch, shorter measure that keeps the last policy's reporting window open but offers no new capacity.
Closing a firm, retiring or selling up? We arrange run-off and tail cover with UK PI insurers and explain the trade-offs in plain English.
Get a PI quote →Which one do you actually need?
For most businesses that are genuinely winding down — a retiring consultant, a closing partnership, a company being sold where the buyer will not assume past liabilities — run-off cover is the right answer. It provides sustained protection across the years when latent claims are most likely to appear, and it satisfies regulators who require it. An ERP alone rarely stretches far enough for that job.
An extended reporting period earns its place in narrower situations: bridging a short gap between policies, or where a claims-made policy is being cancelled or non-renewed and the insurer offers a discovery option. It is also useful when a specialist market exits a class of business and buying a fresh run-off policy proves difficult — the ERP preserves your reporting rights on the expiring cover.
A common mistake is assuming the automatic reporting window on your final policy is "run-off". It is not. A short automatic ERP is a stopgap measured in weeks, not the multi-year protection a ceasing business usually needs. If you are unsure which fits your circumstances, speak to a broker before your current policy lapses — start a quote with Apex and we will map the options to your regulator and your risk.
Points that catch people out
- Buy before you lapse. You cannot arrange run-off after your PI policy has already expired and left a gap. Sort it as part of ceasing trade, not afterwards.
- Limits matter more over time. Because an ERP shares the final year's aggregate, one large claim can exhaust it. Run-off's annual limits give more headroom — whether £1m, £2m, £5m or higher depends on your exposure.
- Check the regulator first. If you are SRA-, RICS- or accountancy-regulated, the required run-off term and minimum terms are set for you; an ERP will not usually discharge that obligation.
- A sale is not automatic cover. Whether the buyer takes on your past liabilities is a matter of the sale agreement. If they do not, you still need your own tail cover.
Common questions
Is run-off cover the same as an extended reporting period?
No. Run-off is a separate, renewable policy that keeps insuring you for past work over several years, with a fresh limit each year. An ERP is a fixed extension to your existing policy that only lengthens the time you have to report claims — and it shares the old limit.
How long should run-off cover last?
Six years is a widely used benchmark and is mandated for some professions, but the right term depends on your work and how late claims typically surface. A broker can advise against your regulator's rules and your risk profile.
Can I rely on my policy's automatic reporting window instead of run-off?
Only for a very short bridge. Automatic ERPs are usually measured in weeks and share the final aggregate limit, so they rarely provide the durable protection a ceasing business needs. For genuine wind-down, arrange run-off cover.
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This guide is general information, not advice on a specific policy or a substitute for your policy wording.