By Mia MacGregor

March 19 - (The Insurer) – The environmental and construction-related professional liability sector is expected to see increased claims activity and continued limit capacity erosion for project-specific professional liability in 2025, according to a report from RT Specialty’s environmental and construction professional (RT ECP) team.

The 2025 Market Update ​​attributed the anticipated rise in claims activity to growing social inflation and stricter terms and conditions for environmental coverage in standard market policy forms.

RT ECP, a division of Ryan Specialty subsidiary RSG Specialty, provides products focused on construction-related professional liability and environmental liability.

In 2025, RT ECP noted that it anticipates new carriers entering the contractor’s pollution liability $(CPL)$ segment, driven by claims remaining low in frequency and high in severity.

In the pollution legal liability $(PLL)$ segment, demand for both transactional and operational PLL is expected to grow due to increased regulation of PFAS chemicals, according to the report.

For general liability $(GL)$ and PLL, RT ECP projected that the market will continue to be impacted by emerging contaminants, class restrictions, limited PLL coverage, and excess capacity.

In GL, CPL, and PL lines, RT ECP reported continued double-digit rate increases in 2024 for environmental contractors with larger fleets, particularly on excess coverage. Additionally, carriers are tightening excess capacity, requiring the placement of unsupported excess limits, which is further driving up overall program rates, according to the report.

RT ECP expects these trends to continue in 2025, along with a growing number of carriers requiring PFAS exclusions.

In the architects and engineers professional liability market, RT ECP expects stability in 2025, with a wide range of both admitted and non-admitted carriers available.

For contractor’s professional liability, inflationary pressures are expected to remain a concern into 2025, with a continued focus on design/build projects.

Additionally, the popularity of owner’s protective professional indemnity products is expected to grow as alternative options become more expensive.

The real estate developers (RED) professional liability market continues to expand, with at least nine insurers currently offering standalone products, typically providing a $5 million limit capacity.

RT ECP noted that it expects further capacity growth in the RED market and anticipates at least one additional insurer entering the standalone RED marketplace in 2025.