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Survey Report

Insurance Marketplace Realities 2021 Spring Update – Errors and omissions


April 21, 2021

Adverse loss trends are pushing underwriters to continue to adjust their pricing and capacity.
Rate predictions
  Trend Range
Large law firms: Increase (Purple triangle pointing up) +10% to +25% (higher for poor risks)
Mid-size law firms: Increase (Purple triangle pointing up) +10% to +15%
Management consulting firms: Increase (Purple triangle pointing up) +10% to +15%
Accountants: Increase (Purple triangle pointing up) +10% to +15%

Key takeaway

Underwriters are continuing to adjust their pricing and capacity due to adverse loss trends, concerns about future claims from recessionary economic conditions, and the possible impact of COVID-19.

Errors and omissions (E&O), or professional liability, is arguably the most complex area of specialized insurance, with several distinct marketplaces:

  • Stand-alone E&O for certain professions (lawyers, consultants, accountants)
  • Technology E&O, sometimes stand-alone, but often coupled with cyber insurance
  • Miscellaneous professional liability (MPL), including those industries without a specific, dedicated policy form

The overlap of professional liability and cyber continues to be a focus in the E&O marketplace.

  • As ransomware attacks have hit professional firms across all industries, insurers are increasingly concerned about silent cyber exposure.
  • London markets have now taken steps to require silent cyber exclusions. While this adjustment has not yet been widely seen in the U.S. and Bermuda, given the fact that London markets participate on most large law firm programs, it may only be a matter of time before those markets follow suit.


  • Capacity is being carefully managed, especially on primary layers where insurers continue to prefer smaller deals. More ventilation is being sought between layers for multilayer participation, with most insurers demanding higher increased limit factors (ILFs) to provide capacity, especially on first and second excess layers.
  • Retentions that have not been increased recently will face insurer scrutiny this year. Insurers are also less inclined to make policy wording enhancements. Underwriters are closely analyzing all aspects of a firm’s practice and expect firms to tightly manage key exposures.
  • COVID-19 continues to impact insurance renewals, with carriers often requesting completion of COVID-19 questionnaires for existing policyholders and for new business. Professionals can expect questions on the expected impact on operations, financials, information security and even legal advice and contract provisions in the work-from-home era.
  • Rate increases vary firm to firm. Consistent with the two-tiered marketplace we are seeing broadly, firms with poor loss experience, risk management weaknesses or historically low rates will see higher rate increases. Better risks paying what insurers deem to be adequate rates will see lower rate increases. Increases may be below 10% for some firms.


  • Accounting firms are continuing to see increased rate pressure, and those firms with losses are seeing premium increases in the 10% to 15% range. London markets are seeking higher premiums than domestics.


  • Evolving product and service delivery technologies are pushing the edges of technology E&O into other coverages, including CGL, cyber and other types of professional liability.
  • Internet of Things (IoT) devices are interacting with people, property and equipment in ways that can create new exposures.
  • New property damage and bodily injury liabilities have arisen from the use of monitoring services that run on IoT technology and connected networks. These new liabilities have led to further focus on contract requirements and interactions between insurance policies.
  • As of late, carriers are more reluctant to offer excess technology coverage on blended technology-cyber programs.


Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed subsidiaries of Willis North America Inc., including Willis Towers Watson Northeast Inc. (in the United States) and Willis Canada, Inc.

Each applicable policy of insurance must be reviewed to determine the extent, if any, of coverage for COVID-19. Coverage may vary depending on the jurisdiction and circumstances. For global client programs it is critical to consider all local operations and how policies may or may not include COVID-19 coverage. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal and/or other professional advisors. Some of the information in this publication may be compiled by third party sources we consider to be reliable, however we do not guarantee and are not responsible for the accuracy of such information. We assume no duty in contract, tort, or otherwise in connection with this publication and expressly disclaim, to the fullest extent permitted by law, any liability in connection with this publication. Willis Towers Watson offers insurance-related services through its appropriately licensed entities in each jurisdiction in which it operates. COVID-19 is a rapidly evolving situation and changes are occurring frequently. Willis Towers Watson does not undertake to update the information included herein after the date of publication. Accordingly, readers should be aware that certain content may have changed since the date of this publication. Please reach out to the author or your Willis Towers Watson contact for more information.


Joe DePaul
National Cyber/E&O Practice Leader, North America

FINEX Cyber/E&O Thought and Product Coverage Leader, North America

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