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OPINION
Still navigating the fallout
E ven as the spread of COVID-19 infections appears to be waning, design firms may be dealing with the enduring effects of the pandemic for many months to come. Several insurers providing architects and engineers professional liability insurance expressed their concerns about the evolving risks facing their clients in 2022 and how this might Despite slowing infection rates, AEC firms and their insurers may still endure the effects of the pandemic for many months to come.
Jared Maxwell
be reflected in their rating plans and underwriting decisions. Here are some key insights from the Ames & Gough 2022 survey of 16 leading insurance companies providing professional liability insurance to AEC firms in the U.S. on critical concerns influencing their decision-making: 1. Economic and social inflation driving up claim costs. The threat of inflation now ranks among insurers’ top concerns that could impact professional liability claim costs and premiums this year. Besides economic inflation, insurers point to social inflation – especially increased litigation, broad interpretation of insurance policy coverages, plaintiff-friendly legal decisions, and larger jury awards – as a major driver of higher claim costs.
2. Supply chain disruptions may have ripple effects. One of the enduring impacts of the COVID-19 pandemic has been issues arising from supply chain disruptions. Notably, 94 percent of the insurers anticipate that supply chain interruptions will lead to potential claims for the AEC industry. These disruptions may trigger higher material costs, project delays, unavailability of critical materials, and higher costs fueling inflation and resulting in higher overall claim costs. 3. Fallout from the “great resignation.” The survey found 63 percent of insurers are concerned about the potential for the great resignation to result in employee shortages at AEC firms and claims. The most significant potential consequences involve
Cady Sinks
See JARED MAXWELL & CADY SINKS , page 10
THE ZWEIG LETTER MAY 30, 2022, ISSUE 1443
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