Run-Off Coverage (Management Liability)

Run-Off coverage, also called tail coverage, keeps protecting people after a triggering event. Such events include a merger, an acquisition, a change of control, or winding up the business. When a company is bought or merges, its old Management Liability policy usually ends. But its directors and officers stay exposed to claims from their earlier time in the role. Run-Off coverage closes this gap by extending the reporting period, commonly for six to seven years, so claims about pre-deal conduct can still be reported and covered. This period broadly matches the usual limitation periods for civil claims against directors in Australia. Run-Off can switch on automatically after certain events, or it can be bought as an extra option. It gives vital protection to outgoing directors and managers after a deal.

Run-Off coverage, also called tail coverage, keeps protecting people after a triggering event. Such events include a merger, an acquisition, a change of control, or winding up the business. When a company is bought or merges, its old Management Liability policy usually ends. But its directors and officers stay exposed to claims from their earlier time in the role. Run-Off coverage closes this gap by extending the reporting period, commonly for six to seven years, so claims about pre-deal conduct can still be reported and covered. This period broadly matches the usual limitation periods for civil claims against directors in Australia. Run-Off can switch on automatically after certain events, or it can be bought as an extra option. It gives vital protection to outgoing directors and managers after a deal.