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Respondents also see the need for technology to address these concerns. Despite a growth in technological advancement among management and professional liability products, portals and services over the past five years, respondents say they need more offerings. According to the survey, 38 percent of respondents seek greater risk management and analytics tools. One in five (20 percent) are looking for improved customer relationship/policy management systems, while 18 percent would like to see more efficient quote-to-bind portals. Fourteen percent want more readily available iPad/iPhone apps and tools, while eight percent said they would like to see better automated claims reporting systems.
“Insureds are facing a fast-moving market,” said Jeffrey Grange, SVP, head of professional lines at Torus. “Every possible dimension of risk is changing and fears of increased prices and gaps in coverage are growing concerns among professional liability insurance buyers. The evolving nature of existing risks and emerging new exposures require insurers to be flexible in order to respond to the changing needs of customers. Specialist expertise is needed now more than ever to steer insureds through the multifaceted challenges faced.”
When asked which legislation will have the greatest impact on the management and professional liability market over the next 12 to 18 months, 35 percent of respondents declared Dodd-Frank as the legislation to watch. This was followed closely by the Health Information Technology for Economic and Clinical Health Act (HITECH Act) (22 percent), as well as the Fair Labor Standards Act (17 percent).
Forty-four percent of all respondents say the biggest impact of the legislation will be a higher number of internal corporate investigations. An additional 29 percent believe that the impact will be felt in a greater need for loss control services, while another 15 percent believe Dodd-Frank will result in more whistleblower lawsuits.
“The impacts of Dodd-Frank will be far reaching and will likely lead to increased compliance costs, new avenues of liability and potential litigation for both public and private companies,” Grange said. “We must also be aware that the inclusion of whistleblower provisions will likely lead many corporations to seek insurance products that address the risks associated with these investigations.”
Nearly two out of three (61 percent) of survey respondents noted privacy and network security as topping the list of risks that the insurance industry needs to be concerned with, compared to five years ago. Respondents also feel that small businesses need to be made more aware of increased regulation (14 percent), increased contract requirements needed to purchase E&O coverage (12 percent) and new employment laws (12 percent).
While social media tools such as Facebook, Twitter and LinkedIn have taken center stage as cost effective means for small businesses to distribute information and build brand recognition, the risks to the companies that use these tools has risen as a result. Despite this reality, many small businesses remain unaware of the potential liabilities that arise from the dissemination and proliferation of content and the delivery of professional services via these new mediums.
Thirty-five percent of survey respondents believe that the biggest risk small businesses must address when using social media is the lack of explicit risk management policies and procedures. This was followed closely by the risk of data leakage and theft (29 percent) as well as a lack of control of potentially damming content being disseminated by employees (24 percent). Twelve percent believe increased personal injury exposure (e.g. defamation, libel, slander) poses the greatest risk.
