Emerging A&E Claim Issues-Emerging A&E Claim Issues Slides

Emerging A&E Claim Issues Slides

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The 2022 Willis A&E report by Willis Towers Watson provides an in-depth overview of emerging risks and claim trends affecting Architects & Engineers (A&E) professional liability insurance. Based on surveys of 12 leading A&E professional liability carriers, the report highlights that the frequency and severity of claims are generally on an upward trend, with claims taking from one to three years on average to settle. Key project types facing severe claims include residential condos, apartments, roads/highways, hospitals, and schools, with condominiums especially risky due to multiple plaintiffs and emotional exposures.<br /><br />Primary disciplines affected by claim severity are architecture, structural and civil engineering, and mechanical/process engineering. Emerging risks identified include cyber exposures, inadequate licensing laws, construction defects linked to unqualified contractors, climate change impacts, the COVID-19 pandemic’s effects on delays and standard of care expectations, and increased third-party claims. Social inflation is noted as driving catastrophic liability, fueled by desensitized juries, wealth disparity, anti-corporate sentiments among millennials, and aggressive plaintiff attorneys.<br /><br />The report emphasizes the importance of risk management strategies including insurance transfers, contractual risk-transfer, risk assumption and control, and avoidance. Contractual risks commonly triggering claim denials or reservation of rights involve indemnification clauses, scope creep, defense and indemnity obligations, and overly broad warranties. Most claims are resolved through settlements and mediation rather than litigation.<br /><br />Jurisdictions considered high-risk include New York, Florida, California, Texas, and Illinois. Approximately half of claims are related to non-technical errors such as negligent design or other factors. Notably, about 79% of surveyed carriers report frequent use of design firm emails against them in lawsuits.<br /><br />Willis A&E offers ongoing education, risk management support, and a podcast series on contract negotiation targeted at enhancing awareness and mitigating evolving professional liability risks for A&E firms operating in a hardening insurance market.

Keywords

Willis A&E report 2022

professional liability insurance

Architects & Engineers claims

claim frequency and severity

residential condos risk

architecture and engineering disciplines

emerging risks in A&E

social inflation impact

risk management strategies

high-risk jurisdictions