On a claims-made-and-notified policy, the end of the policy period is a hard deadline for notifying anything the firm already knows about. A circumstance the insured is aware of but has not notified by expiry may fall outside the expiring policy, while the incoming insurer will usually exclude matters known before their cover began. The window to protect the position on known matters closes when the policy does. This is why brokers speak of sweeping up circumstances before renewal or before a change of insurer.
When a firm moves to a new insurer, the new policy typically excludes claims and circumstances that were known, or ought reasonably to have been known, before inception. Anything the firm was aware of should therefore be notified to the outgoing insurer before the old policy expires. Done properly, the deeming provision ties any resulting claim back to the expiring policy, and the firm carries clean continuity into the new one. Done late, the matter can fall between the two policies entirely.
Run-off cover addresses the position after a firm stops trading, merges or is acquired, and no longer buys annual cover. Because PI is claims-made, a firm that simply lets its policy lapse on closure has no cover for claims that arrive afterwards, even for work done while fully insured. Run-off cover keeps a claims-made policy responsive for a defined period after cessation - commonly several years, and for some professions set by the regulator. It exists precisely because past work continues to generate claims long after the practice has ended.
Some professions have mandatory run-off built into their regulatory regime. Solicitors are subject to run-off obligations under the SRA framework following cessation, and accountants regulated by professional bodies face run-off expectations on closure. These requirements interact with the notification rules: a firm winding down must both notify known circumstances before expiry and secure the run-off that covers what has not yet surfaced. Our guides to solicitors' PI insurance and accountants' PI insurance set out the sector rules.
The practical discipline is to review open matters, complaints and known errors in the weeks before any expiry or change of insurer, and to notify anything that may give rise to a claim while the current policy still responds. For firms approaching closure, run-off should be arranged as part of the wind-down rather than as an afterthought. Timing is tight in practice, because a renewal or a change of insurer is often agreed only shortly before the outgoing policy ends, leaving little room to work through open files. Starting the review early, rather than in the final days, is what makes the sweep-up effective. Apex runs a pre-expiry review with firms, helps identify notifiable matters and arranges run-off cover where a practice is ceasing or changing hands.
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 724952. This entry is general information, not advice on any particular policy.