What is Run Off Cover ?
Our professional indemnity and medical indemnity policies operate on a claims-made basis.
Claims-made cover requires a policyholder to have active cover in place both at the time of an incident occurring and at the time of an incident being notified to insurers.
If you cancel or lapse your claims-made cover (e.g. at retirement, cessation of practice or returning to claims-occurrence cover) you need to ensure that cover is in place to cover the potential for future claims arising from work done during the claims-made policy period. This cover is called run off cover (and can also be referred to as an ‘extended reporting period’ or ‘tail cover’). This is a feature of all Claims-Made policies.
- The Challenge Consultant Indemnity scheme with CNA Insurance Company Ltd includes an automatic 10 year run-off cover period built into the policy wording and the cost is included in the annual premiums i.e. there is no additional cost at retirement.
- Run-off cover is only required if you are cancelling claims-made cover. For example if you decided to change insurance companies at renewal time, cover from the new insurers will usually cover the retrospective period. This is confirmed by a retroactive date on the policy schedule. A retroactive date will indicate how far back cover is valid from.
- Run-Off cover is charged over 12 month periods, with the costs reducing as the potential for claims being notified reduces over time. There is also the option to purchase run-off cover for longer periods (for example retirement). This is called ‘Single Premium run-off cover’.
If you have any questions or queries on this aspect of claims-made cover please do not hesitate to drop me a note to firstname.lastname@example.org
MD – Challenge