Reviewed by Matthew Bartlett, Director · Last reviewed 8 July 2026
PI run-off cover costs in the UK are one of the least discussed and most anxiety-inducing parts of professional indemnity insurance. Run-off protects a firm and its principals against claims arising from work carried out before the firm stopped trading, and because PI is written on a claims-made basis, it is the only thing standing between the firm and personal exposure once the practice has closed. This page sets out how run-off is structured, what drives the cost and what to think about well before the closure decision is taken.
Run-off cover is a policy that responds to claims notified after a firm has stopped trading, in respect of work carried out during the period the firm was active. Because PI is written on a claims-made basis, an ordinary annual policy only responds to claims notified during the policy year. When trading stops, ordinary annual cover cannot be renewed — there is no future revenue to insure against — and run-off fills the gap for the years during which a former client could still bring a claim.
Run-off is not optional for regulated professions. The SRA MTC requires six years of run-off for solicitors' firms that cease practice. RICS requires six years of run-off for surveyors. ARB and RIBA expect adequate and appropriate run-off for architects. The FCA expects continuing PI protection for former financial advisers, with the FOS able to consider complaints for many years after advice was given. For all of these, run-off is a regulator-facing obligation, not a commercial preference.
The mandatory minimum varies by profession. Solicitors on the SRA MTC must carry six years' run-off. RICS surveyors carry six years. ARB architects, and other Building Safety Act 2022, section 135 exposed disciplines, may face a much longer tail of potential liability — the section extended the retrospective limitation period for defective residential work to 30 years and that shows up in insurer appetite for very long run-off periods where the exposure is present. Financial advisers face potential FOS complaints many years after advice, and the FCA expects protection to run alongside.
The commercial question is whether to take run-off in a single six-year policy at closure, in staggered blocks, or on a rolling extension where the market allows. Most firms take a single continuous run-off placement because it gives certainty of continuity; staggered arrangements can produce gaps that are hard to close later.
Run-off cover is typically expressed as a multiple of the final year's premium, paid up front or across the run-off period. The multiple varies by insurer, profession and risk profile, and it is common for the total cost of run-off across the mandatory period to be several times the final annual premium. That figure surprises firms that have not planned for it.
The drivers on run-off cost are the same drivers that price an annual policy, but weighted differently.
The tail exposure of the work carried out. Latent claims potential is the most important input. Work with a long limitation tail — property work, structural design, tax advice, pension transfers — is priced higher than work whose claims tend to surface quickly.
Claims history at closure. A firm with an adverse claims record in the final years often finds run-off more expensive, and in a harder market may need to shop the run-off across multiple insurers to secure terms at all.
The insurer's appetite for run-off. Some insurers write run-off willingly for firms they insured in life. Others do not, and the closing firm has to seek run-off in the wider market. Continuity of insurer helps.
Limit chosen. The regulatory minimum sets the floor, but a firm with historical work that could produce a claim above the minimum will want to carry more. Higher limits price higher.
Market conditions. Run-off is bought at a single point in time, so market conditions on that day matter more than they do for an annual policy that can be re-tested at renewal. A hard market at the moment of closure translates directly into cost.
The most common cause of a run-off surprise is a partnership that has budgeted for the annual premium each year but never modelled the total cost of run-off. When the partners come to close the practice — often at retirement — the run-off bill can be a large drawdown at exactly the point when the drawdown is least welcome.
Two things reduce the shock. First, modelling the run-off cost every year during ordinary trading, so the number is known and can be provided for. Second, having a conversation with the incumbent insurer early in the closure planning — twelve months out is not too early — so the terms of run-off are indicative rather than the first news of them arriving at renewal.
Where a firm's client base is taken over by a successor practice — a merger, an acquisition, a partial takeover of files — the run-off position can shift materially. Under the SRA MTC, a successor practice may inherit the notification obligations for the ceased firm's work, and the run-off cover the ceased firm would otherwise have needed can, in some cases, be provided by the successor's ordinary policy. That is not automatic, and the definition of successor practice under the MTC is technical. Getting this wrong at closure can leave former principals personally exposed even though they thought the position was covered.
Once a firm ceases and the run-off period ends, former partners and directors are exposed personally to any claim that surfaces after the tail runs out. For solicitors and other regulated professions, that exposure includes the possibility of the firm's regulator pursuing former principals for uninsured claims. Choosing an appropriate run-off period — often longer than the minimum for firms with long-tail work — is not a nicety, it is a personal financial decision.
Apex Insurance Brokers advises professional firms through the closure process as well as during ordinary trading. That means we can model the likely cost of run-off during ordinary years so the number is not a surprise, and we can approach the incumbent insurer and the wider market on your behalf when closure is planned. A named broker handles your file from first enquiry through run-off placement, and 95% of our clients stay with us year on year.
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 724952.
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