Why Some Designers Face Ever-Higher Professional Liability Insurance Costs

Beneath the surface, though, there is pain and pressure.

Even without a rate increase, designers are being forced to buy more coverage and higher payout limits, often demanded by their customers, for the risks posed by bigger claims and higher legal defense costs. And those pressures—according to a separate survey by three of the most important design professional associations, ACEC, NSPE and the AIA—are leading insurance carriers to charge more to insure designers involved with apartments and condominium projects—a familiar sources of losses—but also to structural engineers and designers who work on large, complex infrastructure projects.

“Although many insurers are willing to provide higher liability limits, they continue to treat these requests with greater underwriting scrutiny,” says Jared Maxwell, vice president and partner at Ames & Gough.

In the Ames & Gough survey, the insurers generally said the growing overall premiums charged came mostly from increased billings and new policies written. But about half of the carriers surveyed attributed the increase also to claims losses that triggered higher rates.

What’s clear is that a more hazardous legal atmosphere with ever-rising legal defense costs is inflicting financial damage: 60% of insurers experienced higher claim severity, meaning the amount of damages or losses paid, in 2025. That’s up from 53% the prior year and 41% in 2023. No carrier reported a decrease.

Aggressive plaintiff attorneys, expert witnesses, longer resolution times and higher vendor or panel counsel expenses were driving costs up. Expanded eDiscovery for the mountains of documentation that has to be dealt with also is to blame, the survey showed. 

As a result, the dollar cost of an individual claim keeps escalating, the Ames & Gough survey showed. About eight out of ten insurers paid multimillion-dollar claims in 2025, and more than one out of 10 paid a claim in the $10-million to $19.9-million range. Structural engineering topped claim severity rankings, with 80% of the responding insurers citing it, followed by civil engineering at 73%, and architecture, at 60%.

How Other Professions Are Faring

Other professions face similar pressures. According to a 2025 American Medical Association survey of insurers, medical malpractice insurance rates have risen for the sixth consecutive year through 2024, with nearly half of the insurers raising rates and some states seeing jumps of 10% or more, driven by higher claim payouts and what are called nuclear jury verdicts, of $10 million or more.

Lawyers’ professional liability insurance, according to legal industry groups, shows more stable changes in 2025-2026, but some high-risk practice areas continue to drive elevated costs due to large potential financial losses. 

Do Rate Increases Outpace Fee Growth?

For architects and engineers, the professional liability insurers are making higher payout limits available, the Ames and Gough survey indicated. Eight out of ten of insurers are offering over $5 million, and a few offer up to $25 million in some cases.

Source: Ames & Gough

More coverage costs more, squeezing designers who can’t pass those costs to customers.

One principal of a prominent engineering practice says the demand for ever-larger liability insurance limits is outpacing the fees engineers are able to command. “These days there’s almost a market expectation that the per-claim limit should be $10 million,” he said, “and over the course of 40 years that is a ten-fold increase.

“By contrast, the cost of construction of those structures may have increased 2.5 times and the fees a structural engineer is paid over those 40 years might have doubled,” adds the engineer. “So there’s a growing disparity between the amount of compensation engineers are paid, for which we assume risk and risk exposure, and it is going up rapidly and dramatically and causing great concerns.” 

Insurers are forthcoming about where they see the trouble and increasing rates.

In the Ames & Gough Survey, three out of four insurers indicated they are targeting firms that had claims losses with increases, with about half of the surveyed insurers saying the increases are because of projects with riskier design disciplines, such as geotechnical practices, or higher risk projects types, such as condominium apartment buildings. 

In the survey published earlier this year by the American Counsel of Engineering Cos., National Society of Professional Engineers and the American Institute of Architects, several insurers cite specific exposures “that may lead to higher rate increases than in recent years.”

Four insurers cite large or heavy infrastructure as one of those exposures: Aspen Insurance, AXIS Insurance, Berkshire Hathaway Specialty Insurance and Everest National Insurance. 

And three insurers specifically cite structural work as falling into the same category. AXIS mentions “structural inspection.” Everest National says “some structural depending on project and location.” And Professional Underwriters Agency mentions “geotechnical and structural engineering services.”

The three-association survey analysis, published on NSPE’s website earlier this year, cites the increasing complexity of the projects and business and legal environment—and more requests for higher limits.

“With construction inflation raising the value of projects, owners often seek $5 million to $10 million or more in coverage,” NSPE writes. “…When owners seek higher insurance limits from prime consultants, the prime consultants often must seek higher limits from subconsultants.”

All of the trends noted in the survey, NSPE writes, point to growing pressures that in the future could cause either rates to climb higher or the overall availability of coverage to change.