Which type of claims does run-off coverage typically address?

Run-off coverage is designed specifically to address claims made after a policy has expired, particularly those related to incidents that occurred during the period the policy was active. This means that if a policyholder encounters a situation where a claim arises after the expiration of their insurance coverage for incidents that occurred when the policy was still in effect, run-off coverage provides the necessary protection.

This type of coverage is crucial in industries where the potential for claims can arise long after a project is completed or a policy has ended, such as in professional liability or certain types of business insurance. It effectively protects the insured from the risks associated with claims that might emerge due to past actions or services provided under the previous coverage period.

Understanding this is vital for policyholders who may face claims that can emerge long after a policy's termination, emphasizing the importance of having run-off coverage as a safety net in such scenarios.