Remote work is here to stay.
As the nature of work evolves and employers figure out the policies surrounding the new normal — hybrid offices, vaccine requirements, remote benefits, etc. — employment practices liability insurance (EPLI) will be a hot growth sector. EPLI is a sort of catch-all that covers human resources and anything related to how companies handle employees. With so much changing and the potential for claims to arise from remote work — a lot of it being things companies don’t see because they happen virtually now — we’ll likely see more claims around discrimination, wrongful termination, and even dangerous working conditions. In addition to growth in existing policies, remote work will spur the development of new types of coverage that are yet to be defined.
The pandemic will trigger delay claims for construction projects.
Another area under professional liability is Architects and Engineers. The pandemic has widely impacted the design and construction industry with just about every project experiencing some sort of delay. And, as we know, time is money. While architects and engineers may not be directly responsible for delays in construction projects, we will continue to see a significant number of claims in this area. Whether it was stay-at-home orders that kept the labor away or issues with logistics that meant materials didn’t arrive in time, residential and commercial project interruptions will trigger a lot of finger pointing. Fortunately for design professionals, in addition to having little responsibility for the timing of project delivery, they also have the defenses of force majeure, Act of God and impossibility to assert as defenses.
Fewer coverage bells and whistles.
In the soft market conditions of the last decade or more, in addition to year-over-year reductions in rates, insureds and brokers also enjoyed ever broadening terms and ancillary coverages. Many policies expanded to provide supplemental coverage for crisis response costs or reimbursement for the costs of responding to a subpoena. Others lowered the insured’s deductible if a claim was resolved within a specified timeframe. Don’t expect all these coverage enhancements to disappear. But also don’t expect there to be more on the way. In these market conditions, insurers are looking at the “blocking and tackling” of insurance. That means focusing on the appropriate rate and deductible for the coverages offered.
Resilience and creativity are needed to make it through these challenging times. As long as insurers can see these trends as opportunities, then whether they are good or bad for business will be determined by how we respond to them. Every challenge is an opportunity to improve how we do business and, ultimately, how we serve our customers. Supported customers mean a brighter future for insurers, brokers and businesses. By continuing to pay attention to how we evolve and grow our business, we can build the future that helps our industry move forward.
Thomas Bongi is Senior Vice President of Underwriting, Head of Architects & Engineers and Misc. Professional Liability, for Argo Pro.