You may have heard of Run-Off insurance*, but do you really know what it provides cover for? And it’s not like the name suggests, it has nothing to do with the rain! Let us take you through some of the key basics you need to know when it comes to understanding Run-Off insurance.
What is Run-Off insurance?
- It is designed to protect you from claims which may eventuate after you have stopped operating as a business.
- Run Off provides cover for your past work, even when your business ceases to operate, for any acts, errors or omissions that may have occurred prior to a you ceasing business.
- Remember that when a claim arises a current policy must be in force
- It is an extension to your existing Professional Indemnity insurance policy and comes into effect when you stop trading, providing protection for your business.
- Professional Indemnity insurance policies are claims made, which means they only cover claims which are made while the policy is active. The purpose of the Run- Off insurance is provided cover that extends beyond the last date of your business trading if I claim were to occur.
- Not only is Professional Indemnity insurance commonly required in many industries as a form of cover, Run-Off insurance may also be a mandatory requirement for some industries.
How long should Run-off cover be?
It is up to you and your business’ own situation when deciding on how long your Run-Off cover should be. You need to take things like the type of profession and the risk of a claim occurring after you cease to operate your business into consideration.
When you look and weight up the risks and likelihood of a claim occurring, you may have a better time frame as to how long you want your Run-Off cover in place for. Most insurers offer Professional Indemnity run off cover for a period of up to 7 yrs.
It is typical that Run-Off cover is only able to be purchased once for a selected period of time by the insured.
If you need to get your Professional Indemnity or Run-Off insurance sorted for your business today, get in touch with BizCover today. We provide multi-year Run Off options ranging from 1-7 yrs, as well as quotes from multiple leading Australian insurers for your business insurance needs. Get a quote today and experience insurance made easy.
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