EPIC Law Firm Group, a practice within EPIC Insurance Brokers & Consultants (“EPIC”), a national insurance brokerage and consulting firm providing specialized services and products across select industries, today released its 16th Annual Lawyers’ Professional Liability Claims Survey, which indicates that as law firms strive to sustain and grow their businesses, they must constantly navigate challenges of lateral movement, cyber threats, artificial intelligence (AI) and fraud.
The survey reflects the experience of senior claims executives at thirteen leading Lawyers’ Professional Liability insurers that collectively provide insurance to more than 80% of the Am Law 200 firms.
“After five years of relative stability, we are seeing a clear inflection point,” said Eileen Garczynski, Esq., a principal of EPIC Law Firm Group and author of the survey. “Legal malpractice claims frequency is rising again, and severity continues to accelerate, driven by economic pressure, increasingly complex work, and new risk vectors, like AI, that law firms are still learning to manage.” Notably, eight of the 13 insurers polled reported higher claim frequency year over year, alongside continued growth in large-loss claims, including matters reserved or paid in excess of $100 million.
Severity Driven by Complexity and Conflicts
Conflicts of interest remain the single largest cause of legal malpractice claims, with 46% of the insurers polled ranking it the first- or second-most common error. According to Garczynski, “Conflicts of interest continue to be the most dangerous malpractice exposure for law firms – not because they are intentional, but because they are often missed, poorly documented or inadequately revisited as matters evolve. Courts and clients treat these failures with zero tolerance.”
Transactional practice areas, including business transactions, corporate and securities and trust and estate work, continue to dominate both claim volume and severity. Insurers attributed the largest losses to the financial scale of matters, complex documentation and difficult-to-reverse outcomes for clients. The magnitude of today’s malpractice losses has become increasingly significant, with nine-figure claims no longer considered outliers, as complex transactional matters create ‘bet-the-company’ exposure where a single error can translate into catastrophic consequences.
AI and Cyber Risks Move Into Active Claims
Malpractice insurers pointed to several recurring areas of concern, including cyber and AI risks, fraud and client intake. Seven of the 13 insurers polled said they had seen an increase in AI-related claims in the last year. “What is most concerning is that AI-related malpractice exposure has moved from theoretical to real”, according to Garczynski. “The duty of competence cannot be delegated to technology.”
Cyber risks remain another major driver of loss, particularly wire transfer fraud, which insurers described as both common and largely preventable. These incidents continue to stem from breakdowns in verification processes and over-reliance on email-based instructions, despite years of industry warnings and well-established risk controls.
Rising Defense Costs Pressure the Market
Meanwhile, the cost of defending malpractice claims continues to increase, with 11 of 13 insurers polled reporting materially higher defense spending year over year. “Escalating defense costs are reshaping the economics of professional liability,” according to Garczynski. “As claims become more complex and rates continue to climb, insurers are being forced to respond.” A majority of surveyed insurers indicated plans to raise rates in 2026. Escalating defense costs are reshaping the economics of professional liability, underscoring that risk discipline is no longer optional.
Copies of the 2026 Lawyers’ Professional Liability Claims Survey, “Economic and Tech Turmoil Give Rise to Legal Malpractice Risks in 2026,” may be obtained free of charge by emailing requests to eileen.garcznski@epicbrokers.com. Those requesting the survey should include their name, title, affiliation, and phone number, stating “LPL Claims Survey 2026” in the subject line.
About EPIC Law Firm Group
The EPIC Law Firm Group serves the insurance, employee benefit, and risk management needs of Am Law 200 firms to mid-size boutique firms specializing in complex practices. Its team includes attorneys, former underwriters, risk management specialists and experienced brokers and client executives dedicated to meeting the needs of the legal industry. For more information on EPIC Law Firm Group, please visit epicbrokers.com.
About EPIC Brokers & Consultants
EPIC Insurance Brokers & Consultants is a national retail property and casualty and employee benefits insurance brokerage and consulting firm. The firm provides clients with diverse and specialized risk management, property and casualty, employee benefits, private client, and specialty insurance solutions across select industries. EPIC team members operate from locations nationwide, combining strategic expertise and broad specializations to deliver innovative, comprehensive risk solutions. For more information on EPIC, please visit epicbrokers.com.
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