Aon | Professional Services Practice
The Current and Future State of the Global Project Specific Professional Liability Market – Q3 2021
Release Date: November 2021 The professional liability (PL) market (also referred to as ‘professional indemnity/PI’ in jurisdictions outside of North America) has been in a constant state of change over the last three years.
The global markets for both annual corporate policies and project specific insurance for architects/engineers (A&E) and contractors have continued to experience capacity deterioration alongside rate increases. And these restrictions come at a time when the demand for project specific policies from clients has increased.
In this issue of ‘The Sentinel’, we will take a closer look at the project specific market in various jurisdictions around the world. What we have found are consistent themes:
As a result, firms may need to re-think how to approach managing professional liability risk on a project basis.
So when did this shift in carrier
appetite begin, and have we seen the worst of it?
To understand where we are headed, we should review where we have been. Many analysts point to the 2019 Lloyd’s review as the ‘unofficial’ catalyst to the worsening of this sector. It was at that time Lloyd’s conducted a broad review of the portfolio of risks to identify underperforming classes of insurance.
Unfortunately, construction PL was branded among the worst. And the uncertainty created by the COVID pandemic have only enhanced Lloyd’s scepticism of this class of risk. Lloyd’s recently reiterated that they will not tolerate loss-creating syndicates, thus we are likely to continue to see the knock-on effects from their 2019 review. Enhanced underwriting discipline and a further reduction of capacity is likely.
Please click here to access 2021 Global Insurance Market Conditions for Project Policies – Q3 2021.
Contact
Aon’s Professional Services Practice values your feedback. To discuss any of the topics raised in this article, please contact Michael Earp or Mark J. Peterson.
Michael Earp
Architects & Engineers Practice Leader
Chicago
Mark J. Peterson
Managing Director and Design & Construction Firm Practice Leader
Omaha
