Professional liability risk is affected by a few elements, including how well the economy is doing, nationwide litigation trends, and other isolated events. In fact, professional liability insurance claims are going through a transition that could reshape the industry. Although prices have decreased over time, new trends show increased risk. Directors and officers are mostly at risk, being directly affected as these trends are introduced into the market. This could be disruptive and result in an increase in prices. Here are a few factors that could negatively impact the industry:
- Shareholder lawsuits. Economic volatility is on the rise, changing the way in which companies finance themselves. This could have an effect on the stock market, which opens the door to shareholder litigation.
- Negative events. Event-driven litigation is on the rise, and is a major driver of D&O losses. Social media has a direct influence on negative events, which could attract more people wanting to sue.
- Policy pricing. Policy pricing has been pear-shaped over the last few years, with increased litigation driving the number of claims and their severity.
- New employment practices. The EEOC has had record numbers in 2018 for lawsuits and investigations. With transgender policy issues and marijuana legalization, societal trends are disrupting the workplace.
- Forum shopping. Class action suits can be litigated in state and federal courts. This creates an opportunity for multiple cases from the same event occurring in different locations at the same time. This shows indications of increasing in 2019.
- New precedents. There is an increase in multimillion and billion-dollar verdicts while setting new precedents. This creates an era where litigation will be more expensive and leaves the future of litigation in limbo.
- Risk exposure. The amount of risk that has now emerged is evolving faster than ever. Technology has helped in the development of new risks, leaving a definitive impact on professional liability. This could cause a company’s risk to shift over one policy period.
Change may not be all bad, but insurers must be able to work with their agent to understand any changes in their risk profile to establish expectations ahead of time. Additionally, carriers should be able to and must communicate with their clients on how the market is evolving. Being able to explain how these shifts impact the scope of coverage and pricing can help them gain trust while keeping their clients happy. Having the right professional liability insurance protection in place makes a world of difference.
For more information on AmSuisse and their line of professional liability products, contact an agent today.
Formed in 2013, AmSuisse, Inc. has quickly distinguished itself as a wholesale operation that specializes in working very closely with our agents and broker partners to develop responsive, individualized service for each client. Our unparalleled writing support, industry-specific expertise, marketing support, responsive proposals and quotes, strong customer service, and strong relationships with our carrier partners have all helped us to provide the best possible coverage for our clients. To learn more about our available coverage, contact us today at (800) 485-0229 to speak with one of our representatives.