Miscellaneous professional indemnity
In this chapter of our Annual Insurance Review 2019, we look at the main developments in 2018 and expected issues in 2019 for miscellaneous professional indemnity.
Key developments in 2018
Miscellaneous professional indemnity (or emerging professions) remains a class that eludes trendspotting – by its very nature, those professionals insured within it (and the claims they experience) are diverse in every aspect, from the markets they serve to the ways they operate.
Last year we predicted there would be a growth in claims in this area as claimants began more widely to realise not only that claims were possible against the non-traditional professions but also, crucially, that insurance might be available to cover them. This certainly appears to have been the case, and we are starting to see a surge in claims activity across this class of insurance. What we are also seeing (again as predicted) is a surge in coverage disputes, as insurers in this perennially soft market study their wordings very hard before paying out – miscellaneous professional indemnity wordings are among the most insurer-friendly remaining after the Insurance Act and so declinatures are often relatively easy to sustain. The knock-on impact for insurance brokers and their own E&Os is obvious.
What to look out for in 2019
The rapid growth in miscellaneous professional indemnity will inevitably lead to a change in the way this class is treated. We anticipate that 2019 will herald a move towards sub-division of the sprawling mass of discreet professions and trades that make up the class into more streamlined categories, which will then make it easier for insurers to risk-profile separately. This will then allow insurers to bespoke their wordings and increasingly offer sub-sector specialism, which will help create some competitive advantage in a market that might otherwise start to become as saturated as its more established professional indemnity brethren.
One such sub-specialism is likely to be agricultural professionals – over the past couple of years we have seen an increasing number of claims against animal nutritionists, agricultural architects and agricultural consultants (including fish farming). This appears to be a growth area, with often truly niche claims, and tight local communities, making it an obvious candidate for a more specialised product.
Notwithstanding the drive towards sub-specialism, however, the niche nature of the professional (and the lack of any minimum terms) will continue to require higher levels of due diligence and should, therefore, continue to justify higher premiums. It will therefore remain every bit as attractive as ever to insurers and brokers looking to bolster their balance sheets.
Authored by Claire Revell.
Download our full Annual Insurance Review 2019 for more insights.