Revealed – top emerging liability trends for professional services
Revealed – top emerging liability trends for professional services | Insurance Business America
Risk Management News
Revealed – top emerging liability trends for professional services
Evolving building safety laws top the list, but Allianz also warns of untrained AI use
Risk Management News
By
Kenneth Araullo
Allianz has revealed the top emerging liability trends in the professional indemnity space in 2023 as part of its latest report, unveiling a heatmap of what firms can expect in terms of the risk landscape and the urgency of new threats that will present itself to professionals.
Topping the list is the evolving legislation related to building safety, with Allianz rating its impact as critical to operations. Although this has been an issue of concern in the UK since the 2017 residential fire in Grenfell Tower in which 72 people died, new legislation in the country now extends liability periods for claims under the Defective Premises Act from six to 30 years, even retrospectively for completed works.
These changes, which are now being echoed in similar measures in Australia, could result in new legal claims against manufacturers and suppliers, with a potential domino effect on all specialists in a construction project such as architects, engineers, and contractors.
Cyber crime, social engineering, and data loss
Another top emerging risk identified by the insurer are cyber attacks, a phenomenon that is affecting firms globally. The insurer’s risk barometer survey found that over a third of respondents cited cyber incidents as their most important business risk for 2023. It was listed as the foremost concern for 19 countries, including France, India, UK, and Argentina.
New legislation relating to cybersecurity and data protection is fast becoming a main driver for claims in this area. Another cause for alarm for firms looking to not risk claims events are first-party and third-party liability issues arising from social engineering frauds, ransomware attacks, and the hacking of transactions.
Hackers-for-hire, according to Allianz, are also becoming more prevalent as they are utilized to try and influence the direction of legal cases in several jurisdictions around the world.
Despite minor impact, use of new technologies should be considered
While the risk rating for the use of new technologies is comparatively lower than others on Allianz’s list, it remains an area of consideration as continued generative artificial intelligence (AI) becomes more prevalent. These new technologies bring equivalent rewards, but there are also certain risks to consider, the most important of which are authenticity and integrity.
To date, the areas where AI are most prevalent include solicitors and lawyers, certification agencies, real estate agents, construction professionals, architects, engineers, surveyors, auditors, and accountants. The report stressed that generative AI should not compromise confidentiality, especially in the use of service providers such as ChatGPT.
Proper training must also be introduced in works that require AI and other evolving technologies. The report cited an instance in which a New York lawyer faced sanctions over an error-riddled brief drafted with the help of ChatGPT that was used in their client’s personal injury case against an airline company.
“With this publication, our goal is to share this knowledge with customers and bring them up to speed with what’s going on in the market; what we have observed from our claims data, as well as our analysis of emerging risks and trends,” said Diego Assef, Allianz Global Corporate & Speciality (AGCS) head of global practice group, professional indemnity claims. “We indicate which professionals might be particularly vulnerable, discuss what’s on the horizon, relay key risks and possible developments, and rate them from 1 to 4 according to their level of impact.”
What are your thoughts on this story? Please feel free to share your comments below.
Keep up with the latest news and events
Join our mailing list, it’s free!
