In the context of insurance, what does "run off cover" mean?

The concept of "run off cover" in insurance specifically refers to coverage that applies to claims arising from events that occurred before the cancellation of a policy. This type of coverage is important for businesses or professionals who may face ongoing liabilities for actions taken prior to the termination of an insurance policy.

When a policy is canceled, a run off cover ensures that any claims made for incidents that happened during the policy period are still covered, even if the policy itself is no longer in force. This is particularly relevant in professional indemnity insurance, where claims can sometimes arise long after the insured event has taken place.

This allows insured entities to have peace of mind knowing they are still protected for past actions, despite the fact that they may no longer hold an active insurance policy.