Whose problem is a broker's lack of run-off PI cover?
Q: What is the position of the vendor and purchaser brokers if the vendor is unable to get run-off professional indemnity cover?
Run-off professional indemnity cover is made on a claims-based basisand the vendor should have a sensible level of cover in place for a
minimum six-year period after retirement or sale of business.
However, it is increasingly difficult for vendors to secure this. If due
diligence has been carried out and there are no obvious signs there will
be many future claims, a purchaser may still consider progressing with the
purchase. If the vendor sells and is unable to get cover it is potentially
liable
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