Run-Off

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Run-off Run-off, also known as close-out insurance, is a specific type of coverage designed to protect businesses and individuals from potential liabilities arising after their main insurance policy has expired or been cancelled. So what is run-off exactly we will examine run-off in two different scenarios: The insured: This is a type of insurance that provides coverage for claims made after a policy has expired or been canceled. It's particularly important for claims-made policies, where coverage is triggered when a claim is filed, not when the incident causing the claim happened. This protects the insured from being liable for incidents that occurred during the policy period but weren't reported until after the policy ended. The insurer; Sometimes, an insurance company will decide to stop selling new policies and eventually close down. Run-off portfolio in this situation will refer to insurance policies or reinsurance contracts terminated but for which the Insurer or the Reinsurer remains liable for until the final settlement and payment of the claims. During this time, the insurance or reinsurance company will focus on managing its existing policies and paying out claims until all obligations are met. It may be a business or a territory for which the Insurer or Reinsurer is no longer operating but where contracts or liabilities are still in force. Run-off insurance is particularly relevant for: 1) Businesses undergoing mergers or acquisitions: The acquiring company might want to protect itself from liabilities associated with the acquired company's past actions. 2) Businesses ceasing operations: Even if a company shuts down, there's still a risk of future claims arising from its past activities. 3) Professionals like consultants or doctors: Even after they retire or stop practicing, there's a possibility of claims related to their previous work. #benewinsurance #insurtech #inclusiveinsurance #insurance #reinsurance #takaful

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