How claims and lawsuits will impact professional …

How claims and lawsuits will impact professional liability

The P&C industry is shifting towards a risk-based approach for pricing and segmentation in the markets for errors and omissions (E&O) and professional liability coverages. This change is driven by the need to understand where segments are most profitable and where they re not, as well as closely examining claims trends, particularly in terms of frequency and severity. Katherine Gauthier, Intact s vice president of specialty solutions, highlights the importance of considering expanding mandates for professionals, such as pharmacists who can now prescribe for certain ailments, and the emergence of new claims within these spaces. These trends are crucial for pricing sophistication. Economic uncertainty, both in Canada and globally, continues to influence companies views on the need for E&O and professional liability coverages. Brokers should be mindful of the effects of economic uncertainty, as businesses are evaluating their spending, including professional liability coverage. There has been an increase in claims frequency and volume, necessitating brokers to educate clients on the need for such coverages. Smaller companies, in particular, have become cost-conscious when it comes to insurance. Despite strong internal controls, these companies are still concerned about potential claims, especially in the construction space where frivolous claims are on the rise. The growing trend towards a more litigious environment, particularly post-2020, and the lower barriers to bring claims in certain jurisdictions, are also impacting pricing perspectives. Social inflation is another factor that affects future claims and associated defense costs. Potential regulatory shifts and growing environmental, social, and governance (ESG) mandates are also influencing clients. Gauthier s team is engaging with companies to understand their ESG controls, stay updated on shifting policies and procedures, and how they treat employees. The impact of these factors depends on the country or province in which the company operates. In summary, the P&C industry is adapting to a risk-based approach for pricing and segmentation in E&O and professional liability coverages. This shift is driven by various factors, including claims trends, economic uncertainty, cost-cons

Source: canadianunderwriter.ca
Published on 2024-09-23

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