Eight of 15 design liability insurers reported in a recent survey that they would start charging higher rates in 2025, but five insurers kept them the same and two lowered them. Of those who raised rates, most sought increases of 5% or less.
In other words, according to broker Ames & Gough’s annual professional liability insurance market survey, the market and prices for designer liability insurance are generally stable.
Beneath the surface, however, is pain and pressure.
Even without a rate increase, design firms are forced to buy more coverage and higher payment limits, often demanded by their clients, because of the risks that come with larger claims and higher legal defense costs. These pressures—according to a separate survey conducted by three major design professional associations—the American Council of Engineering Cos., the National Society of Professional Engineers and the American Institute of Architects—are leading insurance companies to charge more to insure designers involved in apartment and condo projects, as these are sources of family loss. as well as structural engineers and companies working on large and complex infrastructure projects.
“While many insurers are willing to offer higher liability limits, they continue to treat these applications with greater underwriting scrutiny,” says Jared Maxwell, vice president and partner at Ames & Gough.
In the Ames & Gough survey, insurers generally said growth in overall premiums written came primarily from increased billings and new policies written. But about half of the carriers surveyed also attributed the increase to claims losses that led to higher rates.
What is clear is that a more dangerous legal environment with ever-higher legal defense costs is wreaking financial damage: 60% of insurers experienced increased claim severity, meaning the amount of damages or losses paid, in 2025. That’s up from 53% the year before and 41% in 2023. No carriers reported a decrease.
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Aggressive plaintiff attorneys, expert witnesses, longer resolution times, and higher fees from providers or panel attorneys drove up costs. Expanded e-discovery for the mountains of paperwork that must be dealt with is also to blame, the survey showed.
As a result, the dollar cost of an individual claim continues to rise, the Ames & Gough survey showed. About eight in ten insurers paid multi-million dollar claims by 2025, and more than one in 10 paid a claim between $10 million and $19.9 million. Structural engineering topped the claim severity rankings with 80% of responding insurers, followed by civil engineering at 73% and architecture at 60%.
How are the other professions?
Other professions face similar pressures. According to a 2025 survey of insurers by the American Medical Association, medical malpractice insurance rates are up for a sixth consecutive year through 2024, with nearly half of insurers raising rates and some states seeing jumps of 10 percent or more, driven by higher claim payouts and so-called nuclear jury verdicts of $10 million or more more
Professional indemnity insurance for lawyers, according to legal industry groups, shows more stable changes in 2025-2026, but some high-risk practice areas continue to generate high costs due to large potential financial losses.
Are rate increases outpacing rate growth?
For architects and engineers, professional liability insurers offer higher payout limits, the Ames and Gough survey found. Eight out of ten insurers offer more than $5 million, with some offering as much as $25 million in some cases.
Source: Ames & Gough
More coverage costs more, squeezing designers who can’t pass those costs on to clients.
A principal at a prominent engineering practice says demand for ever-larger liability insurance limits is outpacing the rates engineers can command. “There’s almost a market expectation these days that the limit per claim should be $10 million,” he said, noting that over 40 years that’s a tenfold increase.
“Conversely, the cost of building these structures may have increased 2.5 times and the fees paid by a structural engineer over those 40 years may have doubled,” adds the engineer. “So there’s a growing disparity between the amount of compensation that engineers are paid, for which we take the risk and the risk exposure, and it’s increasing rapidly and dramatically and it’s causing great concern.”
Insurers are reporting where they see problems and rising rates.
In the Ames & Gough survey, three out of four insurers indicated that they are targeting companies that had loss claims with increases, with about half of insurers surveyed saying the increases are due to projects with riskier design disciplines, such as geotechnical practices, or higher-risk project types, such as condominium buildings.
In the survey published earlier this year by ACEC, NSPE and AIAseveral insurers cite specific exposures “that may lead to higher rate increases than in recent years,” he says.
Four insurers cite large or heavy infrastructure as one of those exposures: Aspen Insurance, AXIS Insurance, Berkshire Hathaway Specialty Insurance and Everest National Insurance.
Three insurers specifically cite structural work as falling into the same category. AXIS mentions “structural inspection”. Everest National says “some structure depending on project and location.” and Professional Underwriters Agency notes “geotechnical and structural engineering services.”
Analysis of the three-association survey, published on NSPE’s website earlier this year, cites the increasing complexity of projects and the business and legal environment, and more requests for higher limits.
“With construction inflation increasing the value of projects, owners are often looking for coverage of $5 million to $10 million or more,” NSPE writes. “… When owners seek higher insurance limits from lead consultants, lead consultants often have to seek higher limits from sub-consultants.”
All of the trends noted in the survey, the association writes, point to increasing pressures that could push rates higher or change the overall availability of coverage in the future.
