ASE Insurance Agency (UK) Limited

Run-Off Policies Explained

 

Claims can be made against you for many years after you stop practicing. In some cases your liability could end after 6 years, however, it is possible that you could be liable for up to 15 years.

The nature of Professional Indemnity Insurance means that cover is provided on a claims made basis, so in order for cover to be provided insurance must be held when a claim is made, rather than when an incident occurred.

This why it is important that you ensure that you have in place adequate “run-off” cover when you cease to practice, whether because of retirement or the closure of a business, to cover work previously undertaken.

It is recommended that you acquire a minimum of six years` worth of run-off cover and continue to monitor any risk you have of a claim being made against you after this time. This cover should be held at the same Limit of Indemnity amount as its highest level in the three years prior to the cessation of practice.

Liability can even continue after death so professionals should  ensure that their executors are aware of the risk and continue cover for at least six years after the date that the last professional work was undertaken.

It is standard market practice for cover to be  arranged by firms rather than by individual practitioners, but  ex-employees and past principals should not take this for granted, particularly in the present economic times when firms are becoming  insolvent or may be reducing cover to save cost, It is particularly  important that owners of firms speak to us early if they are considering closing or selling their practice as it is often easier to ensure that  effective run-off cover is put in place while the firm is still  practicing.

We are able to offer two possible options:

 

  • Option 1

    Annual Run-Off Policy

    Annual Run-Off Policy - the policy would be renewed on an annual basis  and you would expect to pay 100% of the expiring PI policy annual  premium in the first year then for the premium to reduce by somewhere in the region of 5-10% at each renewal. This is presuming no claims have  been notified or paid by Insurers and nothing has occurred to bring  about a harding of rates. The reduction is also very unlikely to apply  if you are already paying Insurers minimum premiums.

  • Option 2

ASE Insurance Agency (UK) Limited is authorised and regulated by the UK's Financial Conduct Authority (FCA).

ASE Insurance Agency (UK) Limited FCA register number is 300595. You can check this on the Financial Services

 Register by visiting the FCA's website www.fsa.gov.uk/register/home/do, or by contacting the FCA on 0800 111 6768

ASE Insurance Agency (UK) Limited`s Registered address is: 39a Welbeck Street, London. W1G 8DH .
Registered No. 3276621.
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