Aon | Professional Services Practice
Evolving the Way Law Firms Approach Risk: Aon’s Professional Liability Risk Analyzer
Release Date: September 2026In an era of accelerating change for law firm risk management, scrutiny of professional liability insurance program decisions is also increasing. Aon’s Professional Liability Risk Analyzer is designed to aid firm leaders in making better-informed decisions that align with their risk management philosophy and support firm strategy.
Key Takeaways
- The legal services environment is being reshaped by high client expectations, increasingly complex claims and intensifying regulatory scrutiny.
- Traditional tools, such as peer benchmarking and historical loss reviews, remain important but do not fully capture forward-looking, non-incremental loss scenarios.
- Using Aon’s proprietary actuarial modelling and over 30 years of industry claims data, Aon’s Professional Liability Risk Analyzer provides law firm leaders a stronger foundation for making informed, fit for purpose LPL program decisions.
As the risk landscape for law firms becomes increasingly complex and severe, firm leaders are being asked to articulate why their programs are structured as they are, how much risk remains on the firm’s balance sheet in the event of a loss and whether existing limits will be appropriate when needed.
Aon’s Professional Liability Risk Analyzer (PLRA) focuses on how general counsel, finance leaders, and managing partners can leverage its insights to evolve the way they assess professional liability risk and design their Lawyers Professional Liability (LPL) insurance programs.
The Decision Maker Group Is Expanding. So Are the Questions
Decisions about LPL insurance are no longer the sole domain of the law firm general counsel. Finance leaders and managing partners have become deeply involved in evaluating, understanding and setting the firm’s risk tolerance level.
These stakeholders ask:
- How much loss can we absorb on our balance sheet before it starts to affect partner distributions or capital?
- Do current limits still make sense given the size of our firm and the complexity of the matters that we handle?
- How do we explain to the partnership why we buy the limits that we do and what it would mean if we bought more or less?
To answer these questions, it is important that these decision-makers see how professional liability risk translates into financial exposure, understand how the LPL program reduces that volatility and stress-test different program options to validate their decisions.
From Traditional Tools to a Dynamic, Analytics Led View of Risk
Historically, firms have relied on two primary tools to help answer these questions:
- Looking sideways at peer benchmarking: how similar firms set limits, retentions and program structures.
- Looking backwards at historical claims information: frequency, severity and notable large losses.
These perspectives remain important, but on their own may not prove sufficient in an environment where losses can be both complex and significant. Recent experience has shown that large matters can test longstanding assumptions about limit adequacy and program design.
PLRA brings benchmarking and analytics together to inform decisions and design LPL programs tailored to an individual firm’s risk management philosophy. It builds on traditional industry benchmarking, integrating peer comparisons and historical loss analysis with forward looking, simulation based analytics to deliver a firm specific View of Risk and a more dynamic context for program design.
Using PLRA to Assess Limits and Align Programs to Financial Priorities
PLRA uses Aon’s proprietary actuarial modeling and more than 30 years of Aon’s Lawyers’ Professional Liability claims data to simulate the probability and severity of potential losses across a wide range of scenarios. Law firm leaders can use these insights to:
- Assess limit adequacy by seeing how often, and at what levels, limits are likely to be impacted or exhausted.
- Identify how much risk the firm is potentially retaining in the event of severe, adverse losses under different retentions and structures.
- Stress test existing and alternative program designs to understand how well each structure aligns with the firm’s financial priorities and risk tolerance.
As firms bring together general counsel, finance leaders and managing partners for renewal discussions, PLRA provides a common analytic foundation for those conversations. By demonstrating how limits, retentions and structures have been tested against a wide range of modeled outcomes, firms can more clearly explain their choices internally and in discussions with insurers, supporting a more transparent, risk oriented approach to LPL program design.
If you would like to schedule a demonstration of PLRA and discuss how it may apply to your firm, please contact a member of your Aon broking team.
Contact
The Professional Services Practice at Aon values your feedback. To discuss any of the topics raised in this article, please contact Alex Jenks, Henry Lim or Amanda Wozniak.
Alex Jenks
Senior Vice President and Executive Director
New York
Henry Lim
Managing Director
Montreal
Amanda Wozniak
Senior Vice President and Executive Director
Chicago
About Aon
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