Innovation Meets Exposure: Rethinking Liability Risk in Professional Services

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By Tom Rea
Executive Vice President, Berkley Service Professionals, a Berkley Company

January 13, 2026

In today’s evolving business landscape, service professionals are expanding their offerings to meet client demands, stay competitive and unlock new revenue streams. Modern technologies like artificial intelligence (AI) and virtual service platforms are accelerating this shift by enabling professionals to broaden their scope and serve clients in new and dynamic ways.

Innovation creates new opportunities, but it also introduces new risks. As service professionals venture beyond their core competencies, they encounter liability exposures that are often hard to identify or fully understand. This shift presents both a challenge and an opportunity for insurance carriers, brokers and the professionals themselves.

Expanding Services, Expanding Risk

The rise of the gig economy was one of the earliest signs of this change. Platforms like Airbnb, Uber and DoorDash created new business models that blurred the lines between personal and professional services. Freelancers stepped in to meet increasing demand, often without fully understanding the potential liability risks involved.

More recently, AI has become the most significant driver of change. Professionals in industries from insurance and real estate to consulting and law are integrating AI tools into their workflows to streamline operations, generate content and offer faster analysis. While this technology promises efficiency, it also introduces liability risk. Many professionals don’t totally comprehend how these tools operate, or how their use might be interpreted by clients. With little legal precedent to draw from, the liability risks are difficult to quantify and even harder to defend against when something goes wrong.

Cybersecurity is another growing concern. IT consultants are increasingly expanding their services to include network security, vulnerability testing and data protection. However, as the cyber threat landscape changes, staying up to date is nearly impossible and even minor oversights can lead to data breaches, system failures or litigation.

Virtual services have also become more prevalent, particularly in sectors like healthcare, finance and marketing. While remote service delivery offers convenience, it also brings a higher risk of miscommunication, misunderstandings and technology failures, any of which can lead to legal disputes or claims.

When professionals begin operating outside their core skill set, they may not recognize the potential pitfalls or regulatory requirements involved. For example, a real estate agent branching into home inspections may not understand all regulatory or technical standards, and a marketing consultant offering crisis communication advice may unknowingly issue statements that expose a client to defamation claims. Their advice, while well-intentioned, can be misunderstood or misapplied by clients. Without a strong understanding of the new service area or a clear framework to guide delivery, they’re more prone to errors, omissions and unmet expectations.

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How Berkley Service Professionals Helped a Broker Turn a Crisis into a Long-Term Success

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By Tom Rea
Executive Vice President, Berkley Service Professionals, a Berkley Company

August 12, 2025

Success in excess and surplus (E&S) lines insurance is not only about having the most competitive pricing or the broadest coverage. It’s also about partnership, problem-solving and putting in the work when the stakes are high. Berkley Service Professionals is built around these values.

Here’s how we helped one broker rescue a key client after a seven-figure loss and why brokers continue to count on us for fast, reliable solutions to their most complex errors and omissions (E&O) challenges.

A Broker in Crisis

The broker’s client was a seasoned insurance professional who experienced a single, substantial claim under the agency’s E&O policy. Ultimately, the agency received a non-renewal notice, and their broker had to approach the market for a new solution.

The broker worked hard to find the same $5 million coverage limit, but most markets either declined the risk or provided only retro-inception coverage, leaving the client without prior acts protection. With the expiration date just weeks away, the broker asked for help from Berkley Service Professionals.

A Collaborative Process

We reviewed the seven-figure claim details with the broker and saw it for what it was: an unfortunate, isolated incident at an otherwise well-run insurance agency with no prior claims.

To confirm that understanding, our underwriting team arranged a call with the insured’s leadership, general counsel, and producers. This gave them the chance to explain what had happened and to share the safeguards they had put in place to prevent future claims.

This conversation showed a level of professionalism, transparency, and proactive risk management that gave our underwriters the confidence to take on the risk. We offered the full $5 million policy the client needed, including prior acts coverage. Two years later, we’re still on the account, and the relationship with the broker is stronger than ever.

Why Brokers Choose Berkley Service Professionals

This example shows the value we provide to brokers through our extensive underwriting insight, engagement and speed of service.

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Knowing the Policy Helps Brokers Provide Top-Notch Service

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By Tom Rea
Executive Vice President, Berkley Service Professionals, a Berkley Company

January 22, 2025

As an insurance professional, it’s vital to have a good understanding of professional liability insurance policies. It’s especially important to know what the policy covers and how it responds to various incidents that may occur. Whether your client works in real estate services, insurance services or other service industries, you can provide better assistance if you are well-versed in the nuances of professional liability insurance policies. To prepare yourself for any questions your client may have, it’s important to know who qualifies as an insured, what professional services are covered, what endorsements are needed and what exclusions are in the policy.

Who is an Insured?

For Berkley Service Professionals’ Professional Liability policies, an insured typically is the Insured Organization, which means any named insured designated on the policy declaration, and any subsidiary, which is generally defined as an entity in which the named Insured owns more than 50% interest.

In addition, an independent contractor and an employee are both considered insureds, but only for services performed on behalf of the organization. Other individuals who may qualify as insureds include a partner, principal, officer, director, shareholder, managers, and members, but only for services performed on behalf of the organization.

Finally, named insureds and additional insureds may be added via endorsements to the policy. If you have any questions, always refer to the policy for specific and complete definitions and speak with an underwriter for additional clarification.

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Live Event: Risk Management Best Practices for Real Estate Professionals

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Presented by:
Jay S. Gregory, Partner, Gordon Rees Scully Mansukhani
Tom Rea, Executive Vice President, Berkley Service Professionals

Wednesday, October 2, 2024
10-10:30 AM Pacific
12-12:30 PM Central
1-1:30 PM Eastern

Register Now

Real estate is a difficult and demanding profession. It can also be risky especially when disappointed buyers or sellers improperly blame you when things don’t go as they expected.

In this half-hour live event, we will:

  • Explore the risks inherent in real estate transactions
  • Provide guidance for managing and minimize these risks
  • Discuss how to avoid conduct that can create an exposure to a professional liability claim
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How Do Agents Advise Clients Who Become Consultants?

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As more professionals are opting to provide consulting services, the accompanying insurance exposure may not be top of mind.

By Tom Rea | August 22, 2022

Given the ripples of the coronavirus pandemic over the past two years, more professionals may be hanging out their shingles and opting to provide consulting services. In making such a career change, however, the accompanying insurance exposure may not be top of mind.

After the Great Recession of 2008, the real estate market was drying up, leading some agents to try property management, home inspection and appraisal work. Unfortunately, some did not have the requisite expertise and, consequently, professional liability issues arose.

Any consultant needs to realize that as an independent contractor they no longer have an employer as a buffer between themselves and a client, and therefore need to make sure they are careful not to overstate or misrepresent their expertise.

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Tom Rea Named Executive Vice President of Berkley Service Professionals

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Glastonbury, Conn. (Feb. 4, 2021) – Tom Rea has been named executive vice president of Berkley Service Professionals, a division of Berkley Alliance Managers, a Berkley Company. He is responsible for overseeing the organization’s operations, strategic direction and business development efforts.

“We are excited to welcome Tom,” says Stephen L. Porcelli, president of Berkley Alliance Managers. “He has a strong track record as a leader and innovator in the Miscellaneous Professional Liability Insurance market. Tom joins an outstanding team at Berkley Service Professionals, and together, they have the expertise and experience to enhance our opportunities for profitable growth in this segment.”

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