Run-off claim | UK Insurance Wiki

Category: Claims handling · Reviewed by Matt Bartlett, Director · Founder · Last reviewed 2026-06-11

A run-off claim is a claim made against a firm that has ceased trading or ceased to take new business, handled under the firm’s run-off PI cover obtained at cessation — typically for a six-year period for solicitors and three to six years for other professions.

Definition

When a regulated professional firm ceases trading, claims may still emerge years afterwards. The PI run-off cover (sometimes called “extended reporting cover”, “tail cover” or “succession cover”) provides continued claims-made protection for a defined period after cessation, allowing the firm and its principals to face claims even though no current PI policy is in force.

The mandatory run-off requirements vary by profession. Solicitors must maintain six years of run-off cover under the SRA MTC. Surveyors must typically maintain six years under RICS guidance. Accountants under ICAEW typically have three to six years depending on circumstances. IFAs and other financial intermediaries face the MIPRU 3 regime.

Legal / Regulatory basis

The framework includes:

• SRA Minimum Terms and Conditions for Professional Indemnity Insurance — six-year mandatory run-off.
• RICS Rules of Conduct and PI Requirements — recommended six-year run-off.
• ICAEW PI Regulations — minimum cover for closed firms.
• FCA Handbook, MIPRU 3 — financial intermediary run-off.
• The Insurance Act 2015.

The Solicitors Indemnity Fund (SIF) and its successor schemes have historically provided ancillary protection where firms have closed without continuing PI run-off. The future of SIF and the FSO-administered successor arrangements is a continuing policy question.

For claims that arise after the run-off period has expired, the firm and its principals may be personally liable with no insurance backing. For limited liability entities (LLPs, limited companies), the entity may have been dissolved, leaving the claim with no defendant. For sole practitioners and partnerships, personal liability survives.

How it works in practice

Run-off claims arise in three principal scenarios:

• Latent claims emerging after the firm has closed: most common in conveyancing (long limitation periods under section 14A Limitation Act 1980) and in matters that take time to manifest.
• Successor liability claims: where another firm has succeeded to the closed firm’s matters but the historic act was the closed firm’s responsibility.
• Limitation-extended claims: particularly relevant under the Building Safety Act 2022, where the limitation period for accrued causes of action has been extended retrospectively, reviving claims previously barred.

The claim handling under run-off is similar to live-firm handling but with several distinctive features:

• The firm typically has no continuing operational capacity to support the defence — no current files, no current staff, no current premises. The insurer and panel firm carry more of the operational load.
• Records may have been lost or destroyed. Run-off claims often turn on whether contemporary records can be located.
• The former principals may be the only available sources of evidence; their cooperation is critical.
• The firm’s reputation is less of a constraint on defence strategy than during active trading.

The run-off cover terms are typically identical to the live cover terms at the moment of cessation. The firm cannot increase its cover during run-off (the moment of cessation fixes the position) but it must pay the run-off premium annually for the duration.

Run-off premium structures: typically a single premium covering the full run-off period (3-6 years), or annual premiums declining over the run-off period. The pricing reflects the expected claim development for the firm’s historic book.

For aggregation, run-off claims often share underlying causes with claims notified during the live period. Single-claim doctrine analysis applies, with implications for cover available across the run-off period.

Common variations

“Solicitors six-year run-off” — the SRA mandatory regime.

“Other professional run-off” — RICS, ICAEW, MIPRU 3 and equivalent regimes.

“Successor practice arrangements” — where one firm has succeeded to another, with the successor’s PI cover responding to historic claims subject to the wording.

“Insolvent firm run-off” — where the firm has failed and FSCS or scheme protection engages.

“Extended limitation run-off” — claims under the Building Safety Act 2022 against closed architectural and surveying firms.

Example

A solicitors firm closed in 2020 with mandatory six-year run-off cover obtained for the period 2020-2026. In May 2026 (within the run-off period), a former client of the firm brings a £400,000 claim arising from a 2017 conveyancing matter. The matter involves a defective easement that has only now become apparent.

Notification: May 2026. The run-off insurer is notified. Coverage attaches under the run-off cover.

Handling: the panel firm engaged for the original PI cover continues to act under the run-off arrangements. Records: the firm’s files are stored with the regulated firm-archive scheme; key documents are retrieved. Former conveyancing partner provides a witness statement.

Merits: the easement is likely to have been missed in the 2017 title investigation. SAAMCO analysis limits recoverable damages to the diminution attributable to the missed easement (approximately £210,000) against the pleaded £400,000.

Settlement: mediation 9 months after notification at £180,000 plus £55,000 of costs. Within the run-off policy limit of £2m. The former principals’ personal liability is fully insured.

Without the run-off cover, the former principals would have been personally exposed to the claim, with assets potentially at risk.

See also

• Late-notified claim
• Lost limitation claim
• Solicitors PI claim
• Architects PI claim
• Coverage by claim made
• FSCS claims procedure

References

1. SRA Minimum Terms and Conditions for Professional Indemnity Insurance (current edition).
2. RICS Rules of Conduct and PI Requirements (current edition).
3. ICAEW PI Regulations (current edition).
4. FCA Handbook, MIPRU 3.
5. Limitation Act 1980, section 14A.
6. Building Safety Act 2022.

Last reviewed

By Matt Bartlett, Director, on 2026-06-11. Next review: 2026-12-11.

This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-11. Apex Insurance Brokers Limited, FCA FRN 724952, Companies House 07014570. Not regulated advice — consult your broker on your specific position.