Miscellaneous professional liability insurance covers hundreds of professional classes facing evolving risks from artificial intelligence, remote work arrangements, and changing trade conditions, according to industry experts. While this coverage area remains somewhat insulated from nuclear verdicts compared to other liability lines, carriers are experiencing increased claim frequency driven by heightened societal expectations.

The miscellaneous professional liability market encompasses an expansive range of professional classes, each presenting unique risk profiles. “There are literally hundreds of different classes that fall under that realm,” explains Dan Mogelnicki, Senior Vice President and Professional Liability Product Leader at Westfield Specialty. “Each one of them has a potential for loss, but some are greater than others.”

Certain professional classes demonstrate higher vulnerability to legal actions. Real estate agents and brokers consistently show elevated claim frequency, primarily due to failure-to-disclose allegations if professionals don’t reveal all potential property conditions to buyers or renters. Consultants represent another significant exposure category, with claims typically stemming from failure to advise clients properly regarding compliance requirements, business operations, or financial matters.

Recent global trade developments have spotlighted customs house freight forwarders as an emerging concern.

“This has been on our mind recently because of changes in worldwide trade patterns and tariff policies,” Mogelnicki notes. “Part of the emerging exposure relates to whether the customs house can properly calculate higher import duties.” This represents an exposure that existed previously but now carries potential for increased claim frequency.

Even traditionally lower-risk professionals can face substantial exposures. Interior decorators and space planners, considered relatively low-hazard classes, can encounter significant claims involving incorrect measurements or unforeseen utility conditions requiring costly corrections.

New Ways of Working

Dan Mogelnicki, Senior Vice President and Professional Liability Product Leader, Westfield Specialty

The shift toward remote and hybrid work arrangements is creating new professional liability exposures, particularly affecting younger workers who are missing out on crucial face-to-face training opportunities.

“Professional liability exposures come from two bases: knowledge based, and execution based,” Mogelnicki explains. The reduced collaboration inherent in remote work mirrors challenges experienced in education when the Covid pandemic pushed students into taking their classes remotely.

“The learning was not the same,” Mogelnicki said.

“There was an inability to interact, a lack of training, and a diminished ability to communicate and collaborate,” he said.

Artificial intelligence usage presents another emerging exposure area. While carriers have experienced only a handful of AI-related miscellaneous professional liability claims to date, industry experts anticipate that the number of claims in this area is going to grow.

“We know that these will increase tremendously over the next months and years,” Mogelnicki states, though no significant settlements have emerged yet from this developing risk area.

Unlike some other liability coverage areas, such as casualty, miscellaneous professional liability is relatively insulated from nuclear verdicts. Mogelnicki explains that most nuclear verdicts involve bodily injury components found in products liability, auto liability, medical malpractice, and architects and engineers professional coverage, while miscellaneous professional liability claims typically address pecuniary or economic losses.

However, exceptions exist where policies include contingent bodily injury or property damage coverage. Real estate property managers represent the primary example, where failure to perform duties can result in bodily injury claims that potentially invite larger verdicts.

Like any line of insurance, MPL faces increasing loss frequency due to evolving societal expectations that are leading to more frequent and potentially expensive legal actions.

“There’s an assumption that no one ever makes a mistake, and if something bad happens, people feel entitled to a huge amount of compensation,” Mogelnicki explains. This trend reflects broader cultural shifts that are affecting professional services exposures.

The remote work dynamic compounds these challenges by reducing organic learning opportunities.

Mogelnicki illustrates this with a personal example of an early-career underwriter who spontaneously asked a crucial question during a casual office encounter. “If we were not in the same place, he may never have asked me that question,” he notes.

Virtual meetings, on the other hand, often have a chilling effect on questions due to technical limitations and social dynamics, leading professionals to make potentially problematic assumptions.

Communication and Quick Turnaround

In response to these evolving challenges, leading carriers are emphasizing personalized service and rapid response times.

Westfield Specialty differentiates itself through direct broker communication and problem-solving approaches rather than standardized procedures. ” We have conversations with our brokers to gain an understanding of the risks they are trying to find solutions for,” Mogelnicki emphasizes. “We don’t have a cookie cutter approach.”

The company’s service model prioritizes quick turnaround times, with the majority of submissions receiving quotes within 24 hours. “We’ve built a timely review process that enables a very quick turn around on a large majority of the risks that are submitted,” Mogelnicki said.

“Challenging or complex exposures are going to take a little bit more time, but we’re happy to work with brokers to place such risks,” he said.

This approach extends beyond speed to encompass creative coverage solutions addressing unique broker and client needs. “We strive to be the solution for the challenging situations that our broker customers face,” Mogelnicki states. The strategy focuses on providing comprehensive coverage at fair prices while maintaining flexibility for non-standard risks.

A combination of responsive service, creative problem-solving, and competitive pricing puts Westfield Specialty in a good position to address the evolving miscellaneous professional liability landscape effectively. As new exposures from the use of AI and remote work arrangements continue to develop, carriers emphasizing adaptability and broker relationships appear best positioned to navigate these emerging challenges.

To learn more, please visit https://www.westfieldspecialty.com/.

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Westfield Specialty. The editorial staff of Risk & Insurance had no role in its preparation.