Revealed: Top Emerging Liability Trends for Professional Services

Allianz has revealed the top emerging liability trends in the professional compensation space in 2023 as part of its latest reportrevealing a heat map of what companies can expect in terms of the risk landscape and the urgency of new threats to be presented to professionals.

Topping the list is evolving legislation related to building security, with Allianz calling its impact critical to operations. Although this has been a matter of concern in the UK since the 2017 residential fire at Grenfell Tower which killed 72 people, new legislation in the country now extends liability periods for claims under the Defective Premises Act. six to 30 years, including retrospectively for completed works.

These changes, which are now being reflected in similar measures in Australia, could lead to new legal claims against manufacturers and suppliers, with a potential ripple effect for all specialists in a construction project, such as architects, engineers and contractors.

Cybercrime, social engineering and data loss

Another of the main emerging risks identified by the insurer is cyber attacks, a phenomenon that is affecting companies worldwide. The insurer’s risk barometer survey found that more than a third of respondents cited cyber incidents as their top business risk by 2023. It was listed as the top concern for 19 countries, including France, India, the UK and Argentina. .

New legislation related to cybersecurity and data protection is fast becoming the main driver of complaints in this area. Another cause for alarm for companies looking to avoid risking claims events are first- and third-party liability issues arising from social engineering fraud, ransomware attacks, and transaction hacks.

Hackers for hire, according to Allianz, are also becoming more prevalent as they are used to try to influence the direction of legal cases in various jurisdictions around the world.

Despite the minor impact, the 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 continuous 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 is most prevalent include solicitors and lawyers, certifying agencies, real estate agents, construction professionals, architects, engineers, surveyors, auditors, and accountants. The report emphasized that generative AI should not compromise confidentiality, especially in the use of service providers like ChatGPT.

Proper training should also be introduced in jobs that require AI and other evolving technologies. The report cited a case in which a New York attorney faced penalties for an error-ridden report drafted with the help of ChatGPT that was used in his client’s personal injury case against an airline.

“With this publication, our goal is to share this knowledge with customers and keep them up to date with what is happening in the market; what we have observed from our claims data, as well as our risk analysis and emerging trends,” said Diego Assef, head of Allianz Global Corporate & Specialty (AGCS) global practice group, professional compensation claims. “We pinpoint which professionals might be particularly vulnerable, discuss what lies ahead, convey key risks and potential developments, and rate them from 1 to 4 based on their level of impact.”

What are your thoughts on this story? Please feel free to share your comments below.