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Survey Report

Insurance Marketplace Realities 2022 Spring Update – Architects and engineers

April 7, 2022

While the A&E market has remained fairly insulated from the dramatic rate increases and constrictions in capacity in the broader P&C marketplace, we have seen considerable changes from one of the leading A&E PL carriers.
Rate predictions: Architects and engineers
Trend Range
Professional liability Increase (Purple triangle pointing up) +5% to +10%
Project-specific professional liability Increase (Purple triangle pointing up) +25% or more
General liability/package Neutral increase Flat to +5%
Auto Increase (Purple triangle pointing up) +5% to +15%
Workers compensation Neutral increase Flat to +5%
Umbrella Increase (Purple triangle pointing up) +5% to +15%
Management liability Increase (Purple triangle pointing up) +5% to +15%
Cyber Increase (Purple triangle pointing up) +50% to +100%

Key takeaway

While the A&E market has remained fairly insulated from the dramatic rate increases and constrictions in capacity in the broader P&C marketplace, we have seen considerable changes from one of the leading A&E PL carriers. The next 12 months will provide an indication of how the market will respond to an evolving risk environment.

Professional liability (PL): While the number of available PL carriers remains high, the number of long-term, stable A&E PL markets is finite. 

  • The U.S. PL market will remain relatively competitive, although carriers will be evaluating capacity and retention levels.
  • Design firms can expect a high level of underwriter scrutiny to continue. Firms can expect underwriters to look closely at their commitment to specific risk management practices, including negotiation of fair and insurable contracts and education of their staff on managing A&E PL-related risks.
  • The next 12 months will be a challenging period in the PL insurance market for many design firms — especially those with an adverse loss history.

Insuring single projects brings its own set of challenges.

  • Design firms can expect to pay more for insuring single projects, notably, specific job excess (SJX) and project-specific PL (PSPL), due to a hardening PL market and constriction of capacity.
  • We continue to see a decrease in available capacity within the PSPL market — especially for large civil design-build projects. Some of the leading A&E PL carriers have taken a hard line on these risks in large part due to alternative delivery methods and the utilization of fixed price contracts with unrealistic pricing and contingencies paired with an imbalance of contractual risk allocation.

Emerging A&E claim trends: In January 2022, WTW A&E released a survey of senior claim managers from 12 A&E professional liability carriers. The survey focused on professional liability claim statistics, professional liability claim trends and emerging A&E risks.

  • Professional liability claim statistics
    • The cost and time to settle a PL claim are increasing, with most carriers noting it takes on average two to three years (and sometimes more) to settle a matter.
    • The overall frequency of A&E PL claims has remained stable; however, we are experiencing a definite upward trend in severity and an increase in the overall cost to settle matters.
  • Professional liability claim trends
    • Condo projects continue to be the frontrunner when it comes to the most hazardous project types.
    • Third-party bodily injury claims and design-build/alternative project delivery are the two leading factors behind a continuing trend toward higher severity claims on road and highway/infrastructure projects.
  • Emerging A&E risks
    • Climate change and the evolving standard of care were identified as leading emerging risks for A&E firms.
    • Social inflation is a key contributor to the increase in claim severity. Increased values in verdicts, an aggressive plaintiffs’ bar and concerning trends in reptile theory and litigation financing are fueling this trend.
    • COVID-19 has been referred to as “a slow-moving catastrophe” with considerable uncertainty about its ultimate impact. While certainly a major event, most A&E PL carriers have reported few, if any, direct PL-related claims to date. However, the impact on the economy and A&E risk remains to be seen.

The cyber insurance market continues to harden.

  • An explosion in cyber claim severity, coupled with high frequency, has had a direct impact on premiums, capacity and underwriting scrutiny.
  • In addition to premium increases, critical coverage terms and conditions are being amended, and we are seeing a decrease in available limit and an increase in retention levels.
  • Start the renewal process early and review underwriting trends with your broker to ensure you have the proper protocols in place.
  • While a stand-alone cyber liability is strongly recommended, robust IT practices to mitigate this risk are a firm’s first line of defense.


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 entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).

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Dan Buelow
Managing Director, Architects & Engineers practice

Dan is the Managing Director of WTW A&E, the specialty division for WTW that is exclusively dedicated to providing insurance and risk management solutions to architects and engineers. Dan and his staff of A&E insurance specialists represent over 500 architectural and engineering firms located across the country and practicing throughout the world. Dan and his team provide tailored risk management services, including contract negotiation, claims advocacy and a wide variety of risk management education workshops. Dan is on the ACEC National Risk Management Committee (RMC) and chairs the Cyber Sub-Committee. Dan is active in ACEC, AIA and other associations that support the design community. Dan speaks frequently and has written and presented on a wide range or risk management topics for architects and engineers.

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