Run-On Insurance

There is a widespread misconception that once you were insured when you carried out the work, that those Insurers will cover claims which might arise a number of years afterwards. This is not correct. Insurers will cover your liability while you are actually insured with them.

 

If the claim arises a number of years afterwards, the liability is insured by whatever insurer you are with at the time when the claim arises, but if you have not continued to hold public liability insurance, you could find yourself personally liable.

 

This applies in particular to contractors who operated as Sole Traders.

 

Those who ran their business as a limited company should seek the advice of a Solicitor when leaving the industry so that all the necessary steps can be taken to ensure that they do not incur a personal liability once the company has ceased trading or has

been would up.

 

There is an option available to contractors to take out what is known as Run-On Insurance.

 

This is available through most brokers, is relatively inexpensive but does not cover the liability of the contractor for any claims arising from work which he might carry out following his retirement.

 

It only provides cover against claims which arise from work carried out prior to his retirement from the industry.

 

Such insurance is quite common in the medical and legal profession, where doctors and solicitors provide for claims which might arise from work which they carried out while practicing but which claims did not arise until after their retirement.

 

Such a scenario should not be confused with incidents which occurred at the time when the contractor was insured but which do not come to the Courts for many years afterwards.

 

In such a case the Insurer, who had the contractor on cover at the time of the incident, must indemnify the contractor against any awards or costs incurred, provided always that the Insurers were promptly and truthfully notified of the incident at the time when it

occurred.