Top pick: CoverWallet
- Personal advisors
- Wide commercial coverage
- Industry-specific quotes
Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.
Run-off coverage protects your business from claims of negligence or damage involving services provided during your previous insurance policy. This allows customers to file claims against your business for several years after your policy ends.
Run-off coverage extends your business’s liability after ending the policy, covering past work done by your business. The coverage applies to claims-made policies that only cover claims made while the policy is in force. By buying run-off coverage, a business can end its policy but still file claims for past work that arises several years after the end date.
In most cases, businesses buy run-off coverage when it faces an organizational change like merging with or acquiring another business or closing its doors. Many businesses will buy up to six years of run-off coverage to fulfill their merger or acquisition agreement.
However, run-off coverage only protects businesses for past work. You may need separate liability insurance if you’re continuing your operations.
Top Lights is a national company that designs and renovates commercial lighting. Since the company is expanding globally by merging with Lowell Lighting, Inc., the two companies will use Lowell Lighting’s insurance for professional liability and directors and officers liability coverage.
Top Lights should purchase six years of run-off coverage for professional advice given to clients before the merge. Run-off coverage can also protect Top Lights for CEO and other leaders’ decisions before the merge.
Run-off coverage works similar to an extended reporting period (ERP), also nicknamed tail coverage. However, the main difference is the amount of time the coverage usually lasts. An ERP typically lasts one year, while run-off coverage may be purchased for three or five years.
Businesses with large organizational changes may need run-off over ERP coverage because of the time insured or to meet requirements in a contract. However, professionals like consultants may choose ERP coverage when switching insurance companies.
Trisha is a digital marketing consultant who keeps professional liability coverage in case of a claim. She decides to switch insurance companies to save money on a lower premium. However, Trisha’s new insurance company will cover some previous work but not all work done under her previous policy. For extra protection, Trisha purchases extended reporting period coverage on her previous policy for one year.
Most businesses buy run-off coverage during a major change in structure or control.
The cost of run-off coverage may depend on several factors, including:
Your business may buy run-off coverage after ending your previous liability insurance policy to protect against new claims involving your business’s past work. Once you’ve secured enough coverage, consider other types of business insurance you may need for your new business structure.
Which type of car insurance policy fits your car and driving needs?
Work with a brand name staffed by professionals who understand your breed’s needs.
Welcoming extended family or friends to live in your home is fine with your home insurer, but you might need to tweak a few coverage types.
Nail down the right insurance for your budget and van type, including converted vans or Sprinters.
Find out how schools can protect themselves against COVID-19 liability claims ahead of the new school year.
The best companies blend wide auto and renters coverage, free perks and strong value.
Your top choices for pairing the best savings, options and service when buying multiple insurance policies.
Protect your classic as well as your daily driver with steep liability coverage all on one policy.
This type of limit applies to liability coverage, but it’s most common with commercial car insurance.
Take steps to keep you and your business safe amid violent demonstrations and minimize damage.
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.