This article was produced in partnership with Hiscox UK
Businesses can now face risks that were far less relevant to them five years ago. Where once policies primarily covered professional negligence, insurers now must consider how AI-driven decision-making, automation, and shifting economic conditions impact liability.
According to Liam Barry, Professional Indemnity Underwriting Manager at Hiscox, businesses are embracing digital change faster than insurers previously anticipated. AI, for example, has been around for years, but it’s only recently become such a big issue. “Some of that is down to the sheer amount of content that’s being generated about AI. But it’s also because we’re seeing businesses using it more, and that changes the risks they face. “When you introduce AI tools or automation, it changes not just how they work, but also how we, as insurers, assess the risks they’re exposed to.”
One of the biggest shifts is the role of digitisation in underwriting and claims handling. Insurers, including Hiscox, are using data-driven models to refine their risk assessments.
These models now incorporate real-time data streams, such as IoT sensor data from client operations, and AI-powered predictive analytics that evaluate emerging risks in areas like cybersecurity and regulatory compliance. This level of integration provides a much deeper, dynamic understanding of industry-specific risks, allowing for faster, more accurate underwriting decisions and more responsive, tailored policies.
As more professional interactions move online, errors in digital consultations or virtual advisory services can create new liability exposures. PI policies must evolve to cover these virtual interactions adequately, with many small businesses now preferring streamlined, self-service insurance options.
Hiscox has seen an increasing demand for digital-first policies, where customers can select, adjust, and manage their coverage through online portals. While this has made PI insurance more accessible, this shift towards self-service models requires enhanced transparency to ensure customers are aware of what is - and isn’t – covered. That means greater responsibility on insurers and brokers to ensure that clear information and guidance are provided.
Digitisation is also altering how insurers assess and handle claims. Hiscox is leveraging both internal and external data to gain a deeper understanding of the challenges faced by clients. drawing on insights such as claims histories, regulatory updates, economic indicators, and sector-specific developments.
“The use of data is growing rapidly, and it’s giving us much deeper insights into the risks our customers face,” Barry says.
Another area where technology is changing risk is in hybrid professions. The distinction between traditional roles is becoming less clear, with professionals taking on responsibilities that span multiple disciplines. Electricians now configure smart home systems, environmental consultants advise on carbon offsetting, and recruitment firms use AI to screen candidates. These expansions create new types of liability, which may not be fully covered by standard PI policies.
As businesses expand into new service areas, traditional insurance models may no longer fit their needs. Hybrid professions - such as Health Data Analysts, who combine expertise in healthcare with advanced data analytics to inform patient care and public health strategies, and Digital Learning Specialists, who integrate educational theory with technology to deliver virtual training and e-learning solutions - are becoming increasingly common.
These hybrid roles introduce a mix of professional risks that may not be fully addressed by traditional PI policies. For example, a Health Data Analyst could face liabilities related to data privacy breaches or misinterpretation of sensitive medical data, while a Digital Learning Specialist may be held accountable for the failure of digital content to meet regulatory compliance or learning objectives.
Some industries are being impacted more than others. Electric vehicle mechanics are a prime example -traditionally, they would have been classified as general mechanics, but with the shift to electric vehicles, their work now involves battery technology, software integration, and high-voltage electrical systems. There are around 40,000 EV engineers in the UK already - and that’s predicted to not be enough – making it a whole new profession with different skills and risks.
Economic factors are also pushing businesses to diversify. “Especially when conditions are tough financially, companies are looking for new ways to bring in revenue,” Barry says. “They might take on new types of projects, which means they could be operating outside the scope of their original insurance. That’s something they need to be mindful of.”
Barry predicts the market will see this pattern play out in multiple industries as businesses adopt new skills to stay competitive in a changing market.
“We need to understand that our customers will be adapting the way they do business and potentially be expanding their range of services,” he says. “That means they might be falling outside of standard product parameters or beyond what was envisaged when the policy wording was written. We’ve just got to keep pace with that change.”
Insurers like Hiscox recognise these evolving dynamics and have developed tailored PI coverage to ensure comprehensive protection for these multifaceted professions. Brokers need to carefully reconsider whether the cover they have in place for their clients is enough, and Hiscox can support that process by offering specialist sector expertise.
As Barry highlights, “We don’t just have products for particular customer groups, but whole teams for customer groups: we’ve got specialist underwriters now who will spend almost all their day quoting in a certain sector. That allows an amazing richness of understanding of the customer need as we enter the digital-first era.”
At Hiscox, underwriting teams are increasingly specialising in specific professional sectors, ensuring that businesses receive coverage tailored to their actual risk profile rather than relying on a one-size-fits-all approach.
