Our goal is to help people in the best way possible. this is a basic principle in every case and cause for success. contact us today for a free consultation.
Practice Areas
Newsletter
Sign up to our newsletter
Insurance — professional indemnity
If the professional who harmed you has retired, closed their practice, or is no longer operating — your first instinct might be that the opportunity to claim has gone with them. It hasn’t.
Run-off insurance exists for precisely this situation. Most regulated professions in Australia require practitioners to maintain insurance coverage that extends beyond the end of their active career. That means even years after a solicitor stops taking clients, a doctor retires from practice, or an accountant winds up their firm, there is very likely still an active insurance policy that your claim can be brought against.
Understanding how that coverage works — and how to access it — is the first step toward recovery.
THE BASICS
Run-off insurance is a form of professional indemnity insurance that continues to cover a practitioner for claims arising from work they performed while they were still in practice — even after they have stopped practising.
To understand why it exists, you need to know how professional indemnity insurance is structured. Most professional indemnity policies in Australia are written on a claims-made basis. This means the policy that responds to a claim is the one that was active at the time the claim was made — not the one that was in force when the negligent act actually occurred.
That structure creates a gap. If a solicitor retires in 2021, cancels their professional indemnity policy, and you bring a claim against them in 2024 for advice they gave you in 2019, there is no active policy to respond — unless run-off cover is in place.
Run-off insurance fills that gap. It is sometimes called tail cover or an extended reporting period. Its purpose is to ensure that a practitioner’s past work remains insured even after they leave the profession, so that people harmed by that work have somewhere to direct a claim.
FOR CLAIMANTS
The professional who harmed you may have retired. They may have sold their practice. They may have had their licence cancelled, passed away, or simply ceased operating with no public explanation. In any of these situations, it is natural to assume the ability to claim has evaporated.
That assumption is often wrong.
For many regulated professions, maintaining run-off cover is a legal or regulatory requirement — not a choice. Professional bodies and licensing authorities mandate it precisely because practitioners should not be able to escape accountability simply by stopping work. The obligation to carry coverage for past conduct follows them out the door.
What this means practically: there is likely a policy — held with an insurer, often managed by the former practitioner’s professional body or their former firm — that a well-founded negligence claim can be brought against. Your claim is not automatically extinguished because the practitioner is no longer active.
HOW IT WORKS
When a professional leaves practice, their existing insurer either continues the policy in a run-off capacity, or the practitioner arranges a standalone run-off policy. Some professional associations arrange collective run-off schemes for their members.
The coverage period varies. Under the Legal Profession Uniform Law as applied in New South Wales and Victoria, solicitors are required to maintain run-off cover for a minimum of seven years following the cessation of practice. In some circumstances, the coverage obligation extends even longer.
For medical practitioners, the Australian Health Practitioner Regulation Agency (AHPRA) requires that practitioners carry appropriate indemnity insurance as a condition of registration — and the obligations around run-off coverage are embedded in those requirements.
For financial advisers and Australian financial services licensees, ASIC licensing conditions impose obligations around maintaining appropriate compensation arrangements, including provisions for claims arising after an adviser leaves practice.
The critical point for claimants: a claims-made policy with run-off cover means your claim can still be lodged and responded to even if the practitioner is no longer working. The insurer steps in where the practitioner cannot.
BY PROFESSION
Run-off obligations are most firmly established in the following professions. The scope and duration of cover varies, but the underlying principle is consistent — past work must remain insured.
Legal practitioners in Australia are subject to some of the most prescriptive run-off requirements. The Legal Profession Uniform Law (applied in NSW and VIC) mandates ongoing professional indemnity coverage including run-off provisions. Law Society schemes in other states carry similar requirements. When a law firm closes or a solicitor retires, the firm's insurer is obligated to maintain coverage for claims that arise from work done during the policy period.
Doctors, specialists, and other registered medical practitioners must hold professional indemnity insurance as a condition of AHPRA registration. Medical defence organisations — including MDO Australia, MDA National, and Avant — typically provide run-off cover as part of their membership products. A retired surgeon or general practitioner will generally have run-off coverage in place for work performed during their career.
Australian financial services licensees must maintain compensation arrangements under the Corporations Act 2001 (Cth) and applicable ASIC regulatory guidance. Accountants operating under CPA Australia or Chartered Accountants Australia and New Zealand membership are expected to hold professional indemnity coverage, including provisions for claims arising after leaving practice. The specifics depend on the individual's former professional body and insurer arrangements.
Obligations vary across these professions and are governed by a mix of state licensing legislation and professional body requirements. In many cases run-off cover exists — but it may be less uniform than in legal and medical contexts. The absence of a clear mandatory scheme does not mean coverage is unavailable; it means the position needs to be investigated on its own terms.
PRACTICAL STEPS
If you have discovered negligence by a professional who is no longer active, these are the steps worth taking as early as possible.
Across Australia, professional negligence claims must generally be commenced within three years of the date you became aware — or should reasonably have become aware — of the negligence. In some states a longer general limitation period applies, but the discovery-based period is the one that catches most people out.
Here is the thing many claimants do not realise: the fact that a professional has retired or is no longer practising does not pause the limitation period. The clock runs from your date of discovery, regardless of what the practitioner is doing. If you knew — or should have known — about the negligence two and a half years ago and have done nothing, you may have only months remaining.
Missing that deadline is not a procedural inconvenience. In most circumstances, it permanently extinguishes the right to bring a claim. No extension. No second chance. If you are unsure whether your limitation period is still open, get advice now — not next week.
What can go wrong
Run-off insurance exists as a mechanism, but accessing it is not always straightforward. These are the situations that most commonly create difficulty for claimants.
When a practitioner cannot be located — or has died — identifying who holds the run-off policy requires tracing back through professional body records, former firm details, and insurer registers. It is time-consuming but often achievable with the right approach. Professional bodies maintain registration records and can often point you toward the relevant insurer or estate.
Insurers sometimes dispute whether a claim falls within the run-off period, or whether the underlying negligent act occurred within the period covered by the original policy. These are technical disputes that require careful analysis of the original policy wording and the timeline of events. Getting this analysis right at the outset is important — conceding ground early can make the dispute harder to resolve.
Insurers are commercial entities and will look carefully at whether a claim falls squarely within the policy terms. Late notification, ambiguity about the claim’s nature, or disputes about the policy’s scope can all be used as grounds to resist a claim. This is not unusual — it is a standard part of how insurance claims work — but it requires an experienced response from someone who understands how these disputes typically unfold.
In some situations — particularly where the practitioner was uninsured or where run-off arrangements have lapsed — the relevant professional body may operate a fidelity fund or compensation scheme. These are imperfect substitutes for a proper negligence claim, but they can provide some avenue of recovery where insurance is genuinely unavailable. The available options depend on the profession and the specific circumstances.
How we can help
Pursuing a professional negligence claim when the practitioner is no longer active is not simple. But it is far from impossible — and in most cases it is exactly what run-off insurance is there to facilitate.
Fair Go Australia works exclusively on the claimant side of professional negligence matters. We do not represent professionals or their insurers. We represent the people who have been harmed.
Frequently asked questions
In most cases, yes. Most regulated professions in Australia require practitioners to hold professional indemnity insurance with run-off provisions, meaning coverage continues after they leave practice. Whether an active policy exists depends on the profession, the practitioner’s former insurer, and the timing of the alleged negligence. A free case evaluation can help identify what applies to your situation.
Standard professional indemnity insurance covers claims made while the practitioner is actively insured. Run-off insurance — sometimes called tail cover — extends that coverage into the period after a practitioner has stopped working. It is specifically designed to ensure that people harmed by past professional conduct are not left without recourse simply because the practitioner has retired or closed their business.
The practitioner’s former professional body is often the best starting point — Law Societies, AHPRA, and ASIC all maintain records that can point toward the relevant insurer or coverage scheme. Former colleagues or the firm that took over the practitioner’s files may also be able to assist. In practice, this process is best handled with legal support to avoid inadvertently weakening your claim through early correspondence.
Yes. The limitation period runs from the date you discovered — or reasonably should have discovered — the negligence, regardless of what the practitioner is doing. Retirement does not pause the clock. In most Australian states this is a three-year period from discovery. Missing it permanently extinguishes your right to claim in most circumstances.
If a practitioner genuinely has no insurance and no run-off cover, recovery becomes more difficult but is not always impossible. Options may include claiming directly against the practitioner’s personal assets, making a complaint to the relevant professional body, or accessing a fidelity or compensation fund where one exists. The available avenues depend on the profession and the specific circumstances. Legal advice is essential in these situations.
No. Run-off insurance is professional indemnity coverage that extends beyond the end of a practitioner’s career. Fidelity funds — also called fidelity guarantee funds — are schemes operated by professional bodies to compensate clients who have suffered losses through dishonesty by a practitioner, such as theft of trust funds. They serve different purposes and operate differently. Some claimants may have access to both, depending on the nature of the conduct involved.
Our goal is to help people in the best way possible. this is a basic principle in every case and cause for success. contact us today for a free consultation.
Sign up to our newsletter