Run-off cover is Professional Indemnity cover maintained after an engineering practice stops trading or stops undertaking new work, so claims arising from earlier professional services can still be notified during the run-off period, subject to the policy terms.
It can be relevant when an engineer:
- retires
- closes a practice
- sells a business
- merges with another firm
- stops providing a particular engineering service
Because Professional Indemnity Insurance is commonly written on a claims-made-and-notified basis, cancelling the policy when work stops can leave earlier projects exposed to later claims.
Run-off should generally be considered before the existing PI policy is cancelled, because obtaining equivalent historical cover after a gap may be difficult or unavailable.
The appropriate run-off period depends on factors such as:
- contractual requirements
- limitation periods
- the type of engineering work
- project life cycles
- statutory or registration obligations
- the likelihood of latent defects being discovered years later
There is no single run-off period that suits every engineer.
Where a contract requires PI to be maintained for a stated number of years after completion, that contractual requirement should also be checked against what cover is commercially available.
Engineers Australia’s Professional Indemnity Insurance checklist also provides broader guidance for reviewing ongoing and run-off insurance arrangements.
Need help with planning run-off cover? #
See our Professional Indemnity Insurance for Engineers page, review the engineering insurance FAQs, or request a written quote.
