Runoff provision

{
  "id": "MLC-T-INS-003008",
  "term": "Runoff provision",
  "field": "Insurance and risk management",
  "definition": "A policy provision, found mainly in directors and officers liability coverage, that continues coverage for claims made after a change in control or dissolution of the insured, but only for wrongful acts committed before that event. The run-off period is set in advance, such as six years, and usually requires an additional premium. It is similar to an extended reporting period, but the policy converts to run-off status automatically when the transaction closes.",
  "url": "https://mlchart.com/terminology/insurance/runoff-provision/"
}