Key Takeaways

• Design firms are purchasing higher professional liability limits to address growing project complexity and claim severity.
• Larger deductibles are becoming more common as organizations seek to balance premium costs with risk retention.
• Carrier reputation is becoming increasingly important, particularly among larger firms.
• Cyber insurance adoption continues to accelerate, with many organizations also increasing their limits.

The Data is In. What do the Trends Mean for Design Firms?

The 2026 American Council of Engineering Companies (ACEC) Risk Management Survey shows that architecture and engineering firms are purchasing higher professional liability and cyber insurance limits while assuming more risk through larger deductibles. Carrier reputation, claims expertise, and financial strength are also becoming more influential as firms evaluate insurance options.

The results offer a useful look at how design firms are balancing risk transfer, contractual obligations, and budget pressures. But benchmarks are only a starting point. The more important question is how these trends align with your firm’s project mix, financial position, contractual requirements, and comfort with retaining risk.

Below, we break down the findings and compare data from the 2026 and 2024 surveys to highlight how insurance trends have evolved and the practical questions architecture and engineering firm leaders should consider when planning for 2027 and beyond.

How Is the Professional Liability Insurance Market Shifting for AEC Firms?

The professional liability insurance market remains competitive: AXA XL maintained its position as the industry’s leading carrier with 18% of the overall market. Meanwhile, Travelers posted the largest gain among major insurers, increasing market share from 12% to 15%, while Berkley experienced a decline from 5% to 3%, reflecting the results of their recent change in appetite and underwriting guidelines.

Perhaps most notable is Lloyd’s of London’s lead among the industry’s largest firms. Organizations generating more than $250 million in revenue increasingly favor Lloyd’s, which now controls 28% of that segment. Interestingly, none of these largest firms ranked educational resources among their top carrier selection criteria, suggesting that in-house programming is developed within this sector, and sophisticated buyers are placing greater emphasis on factors such as capacity, claims expertise, financial strength, and market reputation.

Price Still Matters, but Reputation is Gaining Ground

Price will always matter, especially for smaller firms, but the lowest premium is not always the best long-term value. This year’s ACEC survey reflects what many firms have experienced during recent renewals: affordability remains a significant concern.

Among firms with $2.5 million to $5 million in revenue, the percentage naming price as a key carrier-selection factor rose from 62% to 79%. That increase is understandable as firms manage ongoing economic pressure.

Carrier reputation increased as a selection factor from 51% to 57% overall, with an even stronger emphasis among larger firms. In a claim, expertise, responsiveness, and consistency can matter just as much as the initial premium. That is why many firms view their insurer as a strategic partner rather than simply a source of risk transfer.

Broker recommendation topped the list of carrier-selection factors, with 69% of firms ranking it in their top three, ahead of both price and reputation. When carrier appetites and underwriting guidelines keep changing, a broker who understands design risk can help you evaluate whether a carrier understands your operations and exposures, how it approaches claims, and whether its service and risk management resources fit your needs. The goal is not to dismiss price, but to understand what you are receiving for that premium and how the carrier is likely to perform when you need it most.

How are Firms Approaching Limit Selection?

The 2026 ACEC Risk Management Survey suggests many AEC firms are purchasing higher professional liability limits. Across firms of all sizes, the percentage carrying a $5 million per-claim limit increased from 20% in 2024 to 24% in 2026. The increase was even more noticeable among firms with $5 million to $10 million in revenue, where adoption of $5 million limits rose from 13% to 22%.

Larger projects, more demanding contractual requirements, and rising claim severity may all be contributing to the shift. When a client requires limits that appear disproportionate to the firm’s scope or project exposure, design firms can also take a more deliberate approach to negotiating those requirements.

Still, there is no single limit that is right for every AEC firm. Each firm is tasked with evaluating their limit selection based on a myriad of factors, including the size and complexity of your projects, contractual insurance requirements, client expectations, potential claim severity, and financial position.

Deductible Strategies Reflect Greater Risk Retention

The survey revealed that while firms are buying more insurance capacity, many are also choosing to retain more risk.

Mid-sized firms with $20 million to $50 million in revenue showed a noticeable move toward deductibles between $100,000 and $200,000. For some firms, that tradeoff can preserve access to higher limits while reducing premium, but the savings should be weighed against the anticipated balance sheet impact following a loss.

As it relates to large firms, more than half of firms generating over $250 million in revenue now carry deductibles of $1 million or greater, a level of retention not commonly found among firms below that revenue threshold.

This approach allows a firm to handle predictable losses internally and reserve insurance for more severe events. Before increasing your deductible, work with your broker to evaluate cash flow, loss history, claim frequency, and the financial impact an unexpected expense could create. The right retention is one your firm can manage in practice, not just on paper.

What Cyber Limits are Practical?

As AEC firms rely more heavily on technology and digital collaboration, cyber coverage has become harder to treat as optional. Standalone cyber adoption among ACEC firms increased from 60% to 67%, with growth across nearly every revenue category.

Firms are also rethinking how much coverage they need. Among firms with $10 million to $20 million in revenue, selection of $1 million cyber limits declined from 85% to 71% as more firms moved to $2 million limits. Most firms above $50 million now carry at least $3 million in cyber coverage.

Independent Thinking for a Stronger AEC Insurance Strategy

The ACEC survey is a useful benchmark as firms proactively prepare for renewal by reviewing contracts, considering changes in your projects and technology, evaluating whether your limits remain adequate, and deciding how much risk your firm can comfortably retain.

As a privately held and independent insurance brokerage, Holmes Murphy has the freedom to put your firm’s needs first. Our Design Risk team brings specialized market access, industry expertise, and ongoing risk management guidance to help protect your business. We’d love to learn more about your unique potential—reach out today to connect with us!