2026 Brokers E&O Claims Trends
As businesses grow, they become harder to manage because they and their operating environments become more complicated. Indeed, even without growth, many of your business clients may be finding that maintaining their current levels of efficiency and profitability in these turbulent times is challenging enough.
Property and casualty insurance brokers need to keep pace, not only with their clients’ evolving needs so as to provide them with the best possible guidance and advice, but also with the rapid changes in the insurance industry. As this business complexity and specialization increases, mistakes can happen. When errors occur or claims are denied, trends are indicating an increased tendency for businesses to seek redress from their insurance brokers, making them more susceptible to negligence allegations. Here are some general trends:
1. Economic uncertainty is increasing pressure on professional liability
In British Columbia, already known as being relatively plaintiff-friendly, economic uncertainty is driving an environment of increased litigation. Lawyers are seeking to exploit this trend, especially since ICBC moved in 2021 to a no-fault model for its Basic coverage, known as Enhanced Care.
Add to this a growing societal expectation that a party should be held accountable for damages or injuries, even in cases of perceived negligence. Attitudes of “it’s not my fault” and “someone should pay” – also referred to as the “blame culture” – have been identified as a troubling primary driver of behaviour, decision-making, and action in some organizations, and may lead to individuals being more willing to file claims.
Solution: Credibility wins lawsuits. Brokers can succeed in court by demonstrating consistent practices, complete documentation, and company-wide processes and procedures.
2. Brokers’ duty of care is poorly understood
Facing increased overhead and/or decreased revenue, clients may look to their insurance coverage as a place to save some costs. That puts brokers under pressure to sell at the expense of clients’ best interests, which creates a conflict-of-interest exposure. Clients may end up with inadequate or inappropriate coverage, and after a loss, brokers may face allegations of having offered inadequate coverage limits or having failed to recommend appropriate coverage.
Solution: The legal obligation to act competently and in the client’s best interest is the foundation of the broker’s role, and the first thing that will be examined in a legal dispute. Duty of care-focused education for all staff is a priority for every brokerage.
3. Regulatory restrictions are tightening
Expectations across many industries are strengthening due to tightening restrictions by regulatory bodies; a prime example is government’s measures to put guardrails on individual privacy and new technologies such as AI. A 2025 Statistics Canada study found that a rising number of regulations between 2006 and 2021 was associated with reduced GDP, employment growth, and business investment in Canada. Regulatory compliance costs disproportionately affect small- and medium-sized enterprises due to economies of scale.
As laws and reporting requirements are being introduced, even minor non-compliance can lead to costly litigation.
Solution: Despite the challenges, businesses can respond proactively by embracing new regulations and technology, and by establishing best practices for office systems. Businesses can work with industry groups to engage with regulators and influence public policy.
4. Reputations: Here today, gone tomorrow
While your E&O coverage may reduce the financial costs of an error, the lost time and reputation may be difficult or impossible to recover. Reputational risk has always been present; what’s new is the speed, reach, influence, and ubiquitous presence of smartphones and social media, and the immense damage that can result.
Juries are becoming more favourable to plaintiffs in some cases, particularly in the form of increasing high-dollar verdicts against corporate defendants. A prevailing negative sentiment towards corporations can influence jury decisions, especially when faced with evidence that a business has acted without conscience.
Solution: Nurture a good reputation by acting proactively with ethical responsibility and accountability.
Protect, educate, and advocate
Your claims advocacy is a key driver in mitigating reputational and E&O risks. Individual brokers can protect themselves by:
- maintaining complete files,
- establishing and adhering to sound workflows,
- following up on all conversations in writing, and
- by advocating for your clients with insurers.
Brokerage managers and executive leadership can protect themselves with:
- yearly audits to identify potential E&O exposures,
- robust internal resources including continuing education, software, and accounting, and
- by reviewing their brokers’ E&O coverage with a brokers’ E&O expert.
Over time, the interpretation of legal liability has broadened beyond its traditional focus on direct, intentional wrongdoing to encompass a wider range of duties, responsibilities, and actors.
Professionals face a range of threats from changing technology to the legal environment to societal shifts. Professional liability insurance is adapting to the growing demand for protection. It’s shifting from just being an optional add-on to becoming a full-time necessity for business owners and their insurance brokers. Know your risk, mitigate where you can, and protect yourself and your business with coverage tailored by an E&O expert broker.
For more information, please contact:
ProForm Insurance
Michelle Loupret
Chief Operating Officer
Phone: 604-910-0695
Email: michelle@proforminsurance.com
