Insurance Marketplace Realities 2025 – Errors and omissions

Rate predictions: Errors and omissions

	Trend	Range
Large law firms		+2% to +8%
Mid-size law firms		-5% to flat
Management consulting firms		-5% to +15%

Lawyers

• The market is stable, and carriers are taking measured rate action to adjust for inflation and individual firm loss experience. Although excess carriers continue to seek rate adjustments, most primary carriers are reaching rate adequacy and moderating their premium targets based on underwriting criteria.
• Excess markets are still experiencing claim penetration and continue to correct historically low premiums.
• Carriers are continuing to push for higher retentions and using a firm’s revenue as a basis for this increase.
• Underwriters are paying particular attention to:
  • Financial stability of law firms
  • Artificial intelligence and law firm’s controls over its use
  • Cybersecurity and ensuring that redundancies are in place (several firms were impacted by CrowdStrike)
  • Law firms working with entities in sanctioned countries
  • Law firm growth through lateral hires and the integration of these new hires into firm culture, while avoiding the creation of new offices that operate outside of a firm’s structure and culture
  • Managing client selection

Consulting firms

• Underwriters have continuing concerns over consultants working with clients in the tobacco and opioid industries, and potentially crossing the line into proposing or operationally supporting high-risk strategies for regulated or high-risk products.
• High profile claims against consultants, such as Ernst & Young’s audit failures in Wirecard and McKinsey’s in Silicon Valley Bank, have generated additional levels of underwriting scrutiny for consultants providing these types of services.
• Underwriters are still evaluating insureds that work with sanctioned entities and confirming that they have plans in place to address these situations.
• Competition has resulted in lower premium increases for high hazard practice areas and for consultants with solid risk management procedures and low risk practices.
• Underwriters continue to focus on:
  • Cyber controls
  • Practice areas: Turnaround management, cryptocurrency and pharmaceuticals continue to be considered high hazard. Above a specific percentage, firms focusing on actuarial consulting struggle to find capacity.
  • Financials: Clients have become more demanding and are pushing back against concepts like billable hours and are seeking cost transparency.
  • Strategic plans to address the evolution away from clients having to rely on consultants’ specialized knowledge, i.e., the Googleization of expertise
  • Appropriate licenses being in place when insureds work with sanctioned governments
  • Controls over the use of artificial intelligence

Disclaimer

Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).

Contacts

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Geoffrey Allen

Head of Professional Services Practice

email Email phone +1 818 915 4311

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Jason D. Krauss

FINEX NA Cyber Thought & Product Coverage Leader

email Email phone +1 212 915 8374

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