“There’s a general ongoing challenge with professional liability, and it’s almost a counterintuitive thing.”
Those were the words of Michael McLachlan, president at Trinity Underwriting and whose company received Insurance Business’s 5-Star Professional Liability award. While professional liability could not be more straightforward of a product – it is an insurance that protects professionals from risks such as claims of negligence or malpractice – McLachlan shares his insights on how a product can be so “counterintuitive,” and what it means for a Canadian economy that is built on services.
According to McLachlan, professional liability insurance is counterintuitive in the sense that as standards and professionalism improves, “the expectation of the clients increases.”
“Forty (40) or 50 years ago, if you had a heart transplant, there was a very good chance you wouldn’t survive,” said McLachlan. “And so the expectation was ‘this may not work.’ And if it does work, fantastic.”
But modern advances in medicine have since enhanced the procedure, McLachlan noted. Though he does not have the exact figures, he said that heart transplant patient survival rates have drastically improved. Yet this safety improvement has also led to an increase in customer expectations, and thus exposes surgeons to more liability risks.
“Even though the sciences have improved, the quality of the services improved, the expectation has changed. If you don’t survive, then your estate gets very upset and it leads to a launch of lawsuits.”
Medicine is not the only space that has seen this dichotomy, as it also happens in the technology industries.
“Ignoring cyber for a moment, but 10 or 20 years ago it was the norm that if you hired a small IT consulting firm to do a job for you, it would take longer than they said and it would cost more. But everyone expected that,” the president said. “Today, you don’t expect that. So expectation of service standards have changed.”
Professionals should not be worried about getting a lot of claims against them over time; McLachlan instead suggests that they should be more concerned about receiving fewer, but much costlier claims against them.
“It’s not anything specific to do with what’s going on in the world right at this moment,” he said. “It’s kind of a continuous process.”
