The committee is currently addressing the issue of obsolescence, investigating ways to mitigate the effects of outdated equipment within industry. With technological advancements and the push towards more sustainable solutions, the committee is dedicated to staying ahead of emerging trends and ensuring that LMA members are equipped to navigate these changes effectively.

Construction PI insolvencies pose a major threat to the professional indemnity insurance market due to non-recoverable claims, heightened post-insolvency risks and legacy liabilities. This has reshaped underwriting appetite, particularly for high-risk construction sectors, and is an ongoing issue that the committee continues to monitor.

The Building Safety Act 2022 and the Grenfell Tower Inquiry have had a significant impact on PI insurance. For underwriters, this meant heightened exposure to historic claims, especially for cladding and fire safety. This has led to stricter underwriting, reduced appetite, higher premiums, exclusions for high-risk work and a greater focus on run-off cover and risk selection in the construction PI market.

The committee has a legal representative who updates on key legal trends. Recent topics of interest include prior known circumstances exclusions and ​The Court of Appeal’s judgement in Lonham Group Ltd v. Scotbeef Ltd [2025] EWCA Civ 203, which provides clarification on the application of the Insurance Act 2015, particularly concerning the classification of policy terms as warranties or representations.

The AI working group published a report in 2025 examining how artificial intelligence (AI) can impact the international errors and omissions (E&O) market. The report explores both the opportunities and risks presented by the rapid adoption of generative AI (GenAI) across professional services sectors.

A Cyber Working Group was established to review LMA5478 and LMA5479, following instances where cyber-related claims were brought under PI policies for alleged breaches of professional services. These cases raised concerns about the effectiveness of current clause wordings in reflecting underwriting intent. The group aims to ensure that cyber risks are either clearly covered or excluded, as intended by underwriters. 

The group have now published LMA5478B, an update to LMA5478A. This clause forms part of a suite of three Financial Institutions PI cyber clauses:

• LMA5477A: Cyber Risks Endorsement
• LMA5478B: Cyber Risks Endorsement – Limited Exclusion
• LMA5479A: Cyber and Data Exclusion

Please note that LMA5478A has been archived.

Class action lawsuits can lead to large-scale claims that involve numerous plaintiffs, potentially leading to high pay-outs for insurers. The committee is continually reviewing policy terms and coverage scenarios to address the unique challenges posed by class action lawsuits.

Litigation trends in financial institutions insurance are increasingly complex, global and fast-evolving. They reflect the shifting regulatory environment, technological risks and greater scrutiny from shareholders, regulators and customers.

The committee receives regular updates from legal representatives on key topics. Recent areas of interest include motor finance litigation, batch clauses and computer crime wordings, providing valuable insights into evolving legal and insurance challenges in these sectors.

The E&O Committee regularly hosts guest speakers from legal and claims backgrounds to provide insights into emerging risks and industry trends. These sessions support the committee’s commitment to continuous learning and help ensure the market remains informed, prepared and responsive to evolving challenges.

Litigation trends in the US insurance market are evolving rapidly, driven by social inflation, nuclear verdicts and changes in technology and regulation. These trends directly impact claims frequency, severity and underwriting strategy for E&O insurers operating in the US.

The Perrigo judgment in Ireland emphasised the importance of aggregation clauses and specific matter exclusions in D&O insurance. In light of this, the committee continues to engage in discussions on the implications of these clauses, inviting legal experts to provide insights and explore their impact on coverage and claims.

The committee has been reviewing profit commission clauses, with members noting a trend of clauses lacking clawback provisions. As this is an area of growing interest and relevance, a general briefing session is being arranged to support member awareness and understanding of current approaches in the market.

The Shell derivative action decision case highlights the increasing legal scrutiny directors may face over climate-related governance and the evolving landscape of ESG litigation risks.

ESG is reshaping the D&O risk landscape, exposing directors to greater scrutiny, litigation and personal liability. For insurers, it introduces uncertainty, legal complexity and challenges in the underwriting process. As expectations around corporate responsibility rise, D&O underwriters must integrate ESG risk into their assessment models.

Nuclear verdicts – jury awards that far exceed typical compensation – pose a major challenge in this class of business. Driven by social inflation, public sentiment and plaintiff strategies, these awards make assessment more complex and push underwriters to reassess risks to better manage this growing threat.

Litigation funding is an emerging issue, as third-party investors increasingly finance lawsuits in exchange for a share of any settlement or award. This external capital fuels more (and often more aggressive) litigation, extending case duration and raising settlement values. The lack of transparency around funding arrangements also makes it harder to evaluate risk and exposure, creating a growing challenge for underwriters and claims teams alike.

Tort reform varies widely by state, creating an uneven legal landscape. In some jurisdictions, reforms are being rolled back or challenged, contributing to rising claims severity and unpredictability. For insurers, this inconsistency complicates underwriting strategy and pricing, making close monitoring of legal developments essential to managing long-tail liability risks effectively.

PFAS and plastics litigation poses a growing challenge due to increasing legal and regulatory scrutiny around environmental and health risks. The long-tail nature and potential scale of liability make it a significant emerging exposure for underwriters.

Both construction and transport industries face significant risks, including property damage, worker injuries and third-party liabilities. The dynamic nature of these sectors, with increasing project scales and freight volumes, requires insurers to assess risks carefully. Effective coverage must account for safety standards, regulatory compliance and evolving market demands.

Mental health questionnaires assess the mental health risk associated with key individuals (for example, performers, speakers, athletes) whose health is critical to an event’s success. They help underwriters evaluate risk, ensuring appropriate coverage terms while complying with data protection regulations in each jurisdiction.

Strike, Riot, and Civil Commotion poses a significant challenge to the market due to its unpredictability, political sensitivity and potential for large-scale disruption. Coverage is often excluded or limited, particularly for events in politically or socially volatile regions.

The issue of CrowdStrike reflects the growing concern around cyber threats, particularly how they can impact event cancellation, ticketing platforms, venue systems and the non-appearance of key individuals. This has led the committee to review and refine wordings to achieve clarity around what is and isn’t included.

Communicable disease and Covid exclusions limit cover for event cancellations due to outbreaks. Introduced after massive pandemic losses, these exclusions leave insureds exposed and have caused uncertainty in the market. The Contingency Committee continues to review this issue.

The use of artificial intelligence in insurance continues to evolve rapidly, presenting both opportunities and emerging risks for the medical malpractice market. The committee is actively monitoring developments in this area, including potential liability exposures and the impact on underwriting and claims. Work is underway to compile a range of AI-related scenarios to support the committee’s analysis of potential risks and coverage implications.

The Medical Malpractice Committee actively invites guest speakers with expertise in legal and claims matters to share their insights on emerging risks and industry trends. These sessions reinforce the committee’s dedication to ongoing education, ensuring that the market remains well-informed, adaptable and proactive in addressing evolving challenges.

The International Healthcare Wording Working Group has been established to develop an international Excess Health Care Providers’ Liability Policy.

The aim of the working group is to create a clear, uniform wording suitable for non-US territories, where legal systems and healthcare frameworks differ significantly from the US.

Claims and loss trends in medical malpractice insurance have evolved significantly in recent years, reflecting changes in healthcare delivery, patient expectations and legal environments. The committee have developed a Large Verdicts and Settlements Tracker spreadsheet of large claims in the public domain to assess emerging trends.

Accurate valuation is critical for setting appropriate coverage limits and premiums, yet insurers often rely on outdated or incomplete information provided by policyholders. Underinsurance is a growing concern for the committee, particularly in high-inflation environments where rebuilding costs can rise sharply. The committee worked with the LMA Property Insurance Claims Group to develop a model appraisal clause.

Natural catastrophes are a major issue in property insurance due to their increasing frequency, severity and unpredictability, driving larger and more frequent claims. For underwriters, this creates challenges in accurate evaluations and policy terms and is an issue under continuous review by the panel.

US regulation presents a complex challenge in property insurance due to its state-by-state framework. Each state sets its own rules, creating a fragmented regulatory environment. This lack of uniformity increases compliance burdens for insurers operating nationally and can delay product development and pricing adjustments. The panel works with Lloyd’s US legal and regulatory office to keep up to date with developments.

Sustainability is becoming a critical focus in property insurance as climate change, environmental regulation and societal expectations reshape the risk landscape. The challenge lies in balancing these with profitability and risk tolerance.

Twice a year, the panel organises the D&F Forum. The forums explore current regulatory and coverage developments across the US property insurance market.

The events are open to all LMA member market practitioners of D&F property.

The committee monitors the impact of climate change and extreme weather on commercial property insurance. Underinsurance is a growing concern as rising risks outpace coverage, especially in flood-prone areas. The committee works to develop improved risk models and policy wordings to address these emerging challenges effectively.

The LMA’s DARE Computable Binding Authority Agreement (CBAA) initiative addresses key issues that the committee faces, such as improving operational efficiency, enhancing data accuracy and streamlining the underwriting process in commercial lines. The committee’s members provide critical feedback on the modular components being developed in the CBAA, ensuring that the needs of the commercial property and casualty market are met.

The committee liaises with Lloyd’s Complaints and the Financial Services Ombudsman Service (FOS) to address customer complaints within commercial property and casualty lines. This ensures effective resolution of disputes, enhances market practices and supports the development of fair, transparent policy wordings that comply with regulatory standards.