The year 2020 was one that was unprecedented because of natural disasters, political disturbances, social instability, and the global pandemic. The new norm is working in a virtual setting instead of the same office setting. Now that the middle of the year 2021 has arrived, what can we expect the professional workplace to look like, and what is in store for the rest of the year? So far, there is a new political administration in place and the introduction of new vaccines as Americans try to adjust to the changes. As it relates to professional liability insurance and the protection offered to companies and individuals against lawsuits and claims, we are experiencing a rippling effect of the extreme changes of 2020 into 2021. The effect has continued to impact and influence many businesses. This will be the case throughout this year and in the near future. Below are several trends you should watch for.
A Hardened Market
It is obvious that the market is hardening and will continue to do so. Even before the pandemic, the market was experiencing a hardening. This means that there were higher insurance rates and fewer competitions. Dealing with the pandemic and the fact that there are additional professional liability claims, the insurance rates are continuing to rise. However, business owners and companies should try to figure out the appropriate cost for the appropriate risks. It is best to start working closely with insurance brokers for more customization of policies. Most insurers have taken a selective approach and brokers have the task of selling complex accounts to the insurance companies. Therefore, you are now seeing brokers having to submit supplemental storylines in an attempt to explain the lessons they learned from past claims. Then brokers also have to describe the measures for risk mitigation, which the insured undertakes.
Consultants are going solo, which means that there is a demand for the boosting of individual insurance coverage. One of the obvious trends is a flood of professionals exiting the corporate setting and starting their own consultant businesses. Technology has made it so much easier for anyone to work from any location and because of this; professionals have seized the opportunity to become their own bosses. However, no matter, if it is a consultant business or accounting business, many of them are realizing the exposures they have and the need to secure E&O insurance. While in the corporate world, they were insured under the company’s policy, but once these consultants left, there was always a need to seek their own coverage for professional liability insurance.
It is obvious that remote work has become enticing to many since the pandemic. Employers are figuring out that it saves having a virtual office. Many employees find that it has its own benefits to work remotely. Because of this, one hot trend will be employment practices liability insurance, which is known as EPLI. It offers coverage to human resource departments on how they handle their employees in the new norm. With all these changes and the possibility that claims will result from working remotely, you may see more insurance claims as it relates to wrongful termination, discrimination, and working in dangerous conditions. In other words, remote work seems to be forcing insurers to develop new kinds of insurance coverage not yet defined.
Due to the pandemic, there have been delays in construction project claims. This falls under the professional liability insurance category, especially for engineers and architects. The pandemic has vastly affected the construction and design industry. In some cases, it was the work from home orders that caused labor and logistic issues, which meant that the materials were late in arriving. Commercial and residential construction projects were interrupted. This resulted in some finger-pointing.
It is going to take creativity and resilience to get through the pandemic and the future challenges. However, once the insurer is able to notice the trends as viable opportunities, then the key is the response to them, whether they are determined as being good or bad for the business. When the customer is supported, it means a better future for brokers, insurers, and businesses. With all involved parties knowing that things will continue to grow and evolve, then it will open up the ideal opportunities to help the insurance industry as it moves forward. In the grand scheme of things, however, it is important to have an attorney E&O insurance on your side.