Professional Liability, often referred to as Errors & Omissions (E&O) insurance, continues to evolve as services become more complex and client expectations rise. Throughout 2025, E&O carriers have flagged several claim trends that are shaping underwriting decisions, pricing, and coverage terms going into the next cycle.
Understanding these trends helps professionals, consultants, and firms protect themselves before a claim tests their policy.
Missed Scope and Ambiguous Engagements Drive Claims
One of the most consistent claim drivers remains unclear scope of work. Disputes often arise not from poor performance, but from mismatched expectations between what a client assumed was included and what was actually contracted.
Vague engagement letters, outdated proposals, and informal scope expansions without documentation continue to fuel E&O claims across industries.
Contractual Liability Is Increasingly Scrutinized
Carriers are seeing more claims tied to unfavorable contract language. Indemnification clauses, guarantees, and hold-harmless provisions can create liabilities that extend beyond standard professional services.
When professionals agree to contractual obligations that exceed their E&O policy’s intent, coverage disputes become more likely.
Fee Disputes Are Turning Into E&O Claims
Billing disagreements that once ended as commercial disputes are now frequently escalated into professional liability claims. Clients increasingly allege negligence, misrepresentation, or failure to deliver value when fees are challenged.
This trend is especially common in consulting, technology, financial services, and creative professional sectors.
Cyber and Technology-Related Errors Are Expanding E&O Exposure
As professionals rely more heavily on technology, software platforms, and data handling, E&O claims are increasingly intertwined with cyber-related issues. Errors involving system configuration, data handling, software performance, or implementation advice are triggering claims that sit at the intersection of cyber and professional liability.
Carriers are paying close attention to how these risks are disclosed and insured.
Failure to Advise Is a Growing Allegation
Claims alleging “failure to advise” or “failure to warn” have increased. Clients expect proactive guidance, not just execution. When issues arise, professionals are often accused of not flagging risks early enough—even when such advice was outside the original scope.
Clear communication and documented recommendations are critical defenses against these claims.
Defense Costs Continue to Rise
Even when claims lack merit, defense costs remain high. Legal expenses, expert witnesses, and extended litigation timelines are driving up claim severity. Carriers are adjusting deductibles, retentions, and sublimits in response.
Adequate limits and defense cost treatment within the policy are more important than ever.
Late Reporting Still Jeopardizes Coverage
Carriers continue to deny or limit claims due to late reporting. Professionals often delay notifying insurers when an issue first arises, assuming it will resolve informally. By the time a claim is filed, policy conditions may already be breached.
Claims-made coverage requires prompt reporting to protect coverage.
Industry-Specific Exclusions Are Expanding
E&O policies are becoming more tailored—and more restrictive. Carriers are adding exclusions tied to specific services, revenue streams, or industries. Professionals who have expanded services over time may unknowingly operate outside their coverage.
Regular policy reviews are necessary to ensure coverage aligns with current operations.
Underwriting Is More Selective Than Ever
Carriers are placing greater emphasis on risk controls such as contract review processes, engagement documentation, quality assurance, and internal oversight. Firms with strong governance are rewarded with better terms and pricing.
Those without formal processes may face higher premiums or limited options.
Why These Trends Matter Going Into the Next Renewal
E&O claims trends directly influence underwriting appetite and pricing. Firms that understand where claims originate can adjust practices, reduce exposure, and improve insurability.
Waiting until renewal to address these issues limits leverage.
How Skyscraper Insurance Helps Manage E&O Risk
Skyscraper Insurance works with professionals and firms to review contracts, scope language, reporting procedures, and policy structure. We help align coverage with real-world services and identify gaps before claims occur.
Our approach is proactive—focused on preventing coverage surprises and strengthening claim defensibility.
Stay Ahead of Professional Liability Risk
Professional liability claims are evolving alongside client expectations and service delivery models. Staying informed and proactive is the best way to protect your reputation, balance sheet, and future growth.
An E&O coverage check now can help ensure your policy is built for today’s claim environment—not yesterday’s.
