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Insurance, explained

Run-off period

A run-off period is the specified time during which a run-off or related reporting arrangement operates. The phrase describes a timeframe; it does not by itself establish the insurance protection available within it.

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BAU Risk Services — insurance brokerage

01 / The meaning

What it means.

Check how the contract uses the term. It may refer to a period for claims first made against the insured, a period for reporting certain claims, or a period in which existing claims are administered. Those are different mechanisms. Extending notification time does not necessarily extend cover for new acts or for claims first made after the original expiry date.

Duration should be considered with the cessation date, prior-acts provisions and aggregate limit. A multi-year period can leave a single pool of cover available for all claims throughout that time. The appropriate length depends on the activities, potential delay before allegations emerge, contract requirements and applicable law. Avoid treating a commonly discussed period as a universal limitation period or assurance that liability cannot arise later.

02 / Put it in context

A practical example.

Hypothetical example

Hypothetical example: a company sale includes a six-year management liability arrangement. The former directors ask whether that is a fresh policy or a reporting extension, which pre-sale conduct is included and whether defence expenses reduce one shared limit over all six years.

This example illustrates the term. It does not predict a claim outcome.

03 / Read the detail

What to check.

04 / Start a useful conversation

A question for your broker.

What rights does this run-off period extend, and what remains excluded once the original policy period has ended?

Further reading

Read the source guidance alongside the relevant policy wording.

General information only. This does not take into account your objectives, financial situation or needs. Before acting, consider whether the information is appropriate for you. Cover is subject to insurer acceptance and the policy terms, conditions, limits and exclusions. Read the Financial Services Guide and the relevant PDS (where applicable) and/or policy wording before deciding.

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