Closing your practice
Use our run-off calculator and get peace of mind for your next chapter
What is run-off cover?
A regulatory requirement, run-off cover is insurance for claims made against a law firm after it has stopped doing business. It makes sure that clients can be compensated for claims made after a firm has closed and retired partners of the firm have financial security and won’t be personally liable for any claims. Run-off cover will be provided by the insurer covering the practice at the time of cessation.
How long do I need it for?
Cover lasts for six years after the firm’s Professional Indemnity insurance has ended.
What will it cost?
You can find out how run-off premiums are calculated by referring to your insurance documents or speaking to your broker. Existing Travelers Professional Indemnity customers can obtain an indicative price by using our calculator.
What about the excess?
Any excess under the policy will apply to the run-off cover unless otherwise agreed and you will be liable for that excess in the event of a claim.
Keeping your legacy safe
If you do not obtain proper consent from clients about where they
want their money and papers to go, you could act in breach of
trust, breach confidentiality and become subject to a complaint by
the client to the Legal Ombudsman Service. There could also be
The Law Society's guide on run-off
Make sure that closed files are archived and destroyed promptly where appropriate. Also ensure that clients' confidentiality is protected, a duty that continues after a client's matter has concluded. Files and papers should be stored securely to protect confidentiality and to safeguard any money or assets.
What are the next steps?
Notify former clients
Notify any former clients who may be affected, for example those who have appointed you executor in a professional capacity and those clients for whom you hold documents, such as wills or title deeds. That may be an opportunity for them to collect such documents and reduce your future archiving cost.
You will need to review all outstanding undertakings and so far as possible, take any necessary action to discharge them.
Deal with client monies
You should endeavour to deal with all client money by, for instance, sending money to clients or others, paying counsel, and billing for your outstanding costs. Any withdrawals must be in accordance with rules 5.1 to 5.3 of the Accounts Rules.
You must deal promptly with any monies remaining in the client account, or received after your practice closes, in accordance with rule 2.5 of the Accounts Rules.