Professional liability is increasingly complex terrain. The distinctions between D&O, EPL, and cyber insurance are blurring - and that ambiguity brings both opportunity and risk. According to Jacqueline A. Waters, Esq. (pictured), managing director and practice leader of the financial services group at Aon, the traditional siloed approach to coverage is no longer fit for purpose.
“Geographies where there are specialties… there are things that can be blended,” said Waters. “Especially in the smaller to mid-market, some of that can really be very helpful and cost saving and overlap.”
As cyber, tech, crime, and fidelity risks increasingly intersect, many claims don’t fit neatly into a single policy category. Clients are left asking: which coverage applies? “You can see, maybe there's a question as to how the claim presents, as to what kind of coverage might apply,” she said.
London markets are leading the shift, Waters noted, with blended programs emerging particularly at the excess or umbrella layers. “Maybe it's not a primary basis, but maybe it's an excess or an umbrella basis, where you blend some other coverages up on the higher layers for capacity,” she said.
Large corporations often still structure their programs vertically due to the limits required. But smaller and mid-market firms have more flexibility – and potentially more to gain. “Some smaller, mid-market companies, they will blend those things… there can be a little bit of an overlap sometimes in that space,” Waters said.
One exception remains: public company D&O. “Public D&O is probably very siloed, very separate, just because of the nature of what it covers,” she said. Still, she believes even here, there’s room to rethink excess layers.
For Waters, coverage ambiguity isn’t just a legal problem – it’s an organizational one. Misaligned expectations among legal, HR, and procurement teams can derail claims handling.
“Many organizations still struggle to interpret complex policy language when claims arise,” she said. Aon’s answer: in-depth policy walkthroughs. “We’ve done what we’d call, like a policy read… Sounds dreadful… but you kind of go through it and say what all the things are supposed to be and what it's designed to do and what it's not designed to do.”
These walkthroughs aren’t compliance exercises – they’re strategic alignments to ensure internal stakeholders speak the same language when a claim hits. “The purchaser… might not have gone to legal with everything, and the law department might have different ideas of what should be there or how it should work,” Waters said.
The goal is clarity. “To know enough so that they know when to ask a question, or that something might be a gray area or might be ambiguous,” she said.
Without that clarity, policy limits can be squandered – or worse, unused. “You may have to make some choices about how you want to use something,” she warned, especially in multi-claim scenarios where sequencing matters.
Waters was blunt about the current state of underwriting. “If we have a client that is a much better risk than the group… you want to showcase that to the underwriters,” she said. “Why they're better at risk, why they've done this thing, or why they don't face the same exposure.”
That differentiation is critical for clients in penalized industries or geographies. “Yeah, we're in California. Can't help that, but this is what we're doing,” she said.
Her warning: don’t let good risks get buried in bad group averages. “The temptation is going to be… they may have kind of pegged it at a certain price level, but you have to get it out of that place.”
