Insurance is supposed to be a safety net. But too often, it feels like an obstacle course—with complex policies, ambiguous language, and unexpected claim denials standing in the way of real protection. The shift towards claims-made policies, rising litigation costs, and new liabilities like cyber risks have only added to the confusion.
So, how do we fix this?
Frederick Fisher, the President of Fisher Consulting Group, has spent 50 years tackling this very question. Not many professionals can say they’ve shaped an entire industry, but Fred certainly can. Over the past 50 years, he has watched professional liability insurance evolve—from the rise of claims-made policies to the increasing risks posed by cyber threats and litigation complexities. And through it all, he has remained one of the industry’s most trusted voices.
For Fred, insurance is more than just a product; it’s a promise. He has dedicated his career to ensuring that promise is kept, advocating for transparency, education, and fairness in an industry that often falls short.
From his early writings on the pitfalls of claims-made policies to his recent book aimed at educating consumers, he has consistently worked to bridge the gap between insurers and policyholders. His message is clear: an informed policyholder is an empowered one. In a world where insurance companies are increasingly focused on minimizing payouts, Fred’s voice is a refreshing reminder of the industry’s true purpose—to protect.
Inspired by his tireless advocacy and commitment to education, we sat down with Fred to delve into his journey, his insights, and his vision for the future. What emerged was a conversation that’s as enlightening as it is inspiring—a testament to why Fred Fisher is a true innovator in the world of insurance.
Let’s dive into the excerpts from the interview-
Reflecting on your 50-year career, how have you seen professional liability insurance evolve, particularly with the introduction and adoption of claims-made policies?
Over the past 50 years, I’ve witnessed significant changes in the professional liability industry, and not always good ones. Claims made insurance policies have certainly contributed and provided a lot of benefits to the professional liability insurance industry since its adoption. This included actuarial certainty, better pricing, and a reduction in the cost of insurance, as claims-made policies are traditionally less expensive than occurrence-based policies. On the other hand, a lot of hazards didn’t exist 50 years ago, such as cyber liability and high-tech exposures. These two are now written on a claims-made basis. If there’s any industry that is constantly evolving, it is the professional liability and specialty lines industry. Our world can get turned upside down by the simple stroke of an appellate court, and claims made policies have certainly had to adapt quickly to such events. That said, what we’re seeing now, however, is not limited to the professional liability industry but an overall trend in the industry of insurance companies trying to maximize profits by covering less.
Your publication “Claims-Made Insurance – The Policy That Changed the Industry” delves into the transformative impact of claims-made policies. What motivated you to write this book, and what key message do you hope readers take away?
Over the past 50 some years, I have noticed significant changes in claims made policies as documented in the book which provides a history of its evolution. By the early 1990s, the lack of standardization became apparent to the extent that many policies had different definitions of the word “claim,” the definition of which can vary from policy form to policy form. This created many claim problems. Thus, my first published article documented those problems in 1990. Since 1990, I have authored several more published articles dealing with certain segments of the claims made policy form that became problematical in order to educate the brokers selling them, the policyholders buying them and the claims personnel handling the claims arising from them. Ultimately, given the significant number of continued denials of coverage because policyholders were not reporting their claims in the manner the policy required, I authored a lengthy article in 2023 that examined 224 Appellate cases where coverage was denied for those reasons. That motivated me to write a comprehensive book that covered all of the provisions of a claims made policy to better assist policyholders in understanding what they need to do in order to preserve coverage and have the protection they paid for. Thus, I wrote this book not for industry professionals, but for the consumer. They need to be better educated about how these policies function and what they need to know so as to enjoy the financial protection they should have.
As a faculty member at the Claims College’s School of Professional Lines and a contributor to industry publications, how do you view the importance of education in enhancing risk management practices?
Education is extremely important in order to enhance the risk management practice of any organization, whether it is the insurance brokerage providing services to a customer, or the policyholder themselves. The relationship between the consumer and supplier of insurance has to be symbiotic; they have to work together. Too many believe that we all buy insurance and expect that everything will be taken care of, a belief that is naïve. Policyholders have to do a better job in understanding the risks and hazards that they are obtaining protection for and doing their best as well to work in such a manner so as to minimize the risk of loss, which benefits everyone.
By doing so, claim frequency can be reduced, and pricing can become more affordable. And policyholders can focus on their business instead of spending significant time away from their work while assisting counsel in their defense.
If everyone just walks around thinking “I have coverage so I don’t have to care,” bad things are going to happen which will make it more challenging for insurers to be able to provide the products and services that everyone expects, and at a price they can afford.
What are the most pressing challenges currently facing the professional liability sector, and how can industry professionals navigate these complexities?
This is a difficult question to answer. There are numerous challenges, such as insurer capacity to underwrite coverage, consolidation in the industry due to mergers and acquisitions limiting the number of insurers that will write the coverage, increasing litigation expenses, deteriorating claims-handling knowledge, and policy language becoming more complicated and intentionally covering less. Certainly, some of these issues can only be solved by appropriate legislation and regulatory oversight.
Other issues may have to be resolved during the litigation process, including Appellate Court review of troubling policy language and how restrictive it is becoming. But in reality, there has to be a balance between insurance pricing and claim handling expertise. A lot of money is being unnecessarily wasted on attorney fees, for instance, because claims are not being rapidly developed like they used to by utilizing boots on the ground knowledgeable claim adjusters. They certainly charge far less than a law firm. Law firms don’t investigate claims, they evaluate admissible evidence. There is a significant difference between those two processes.
Given the dynamic nature of the insurance landscape, how do you foresee the role of claims-made policies evolving in the next decade?
The basic concept will stay the same. Hopefully, policy language will become more standardized, not only in the industry, but even within the same insurance company. It is amazing that an insurance company might have several different types of risks they insure, such as D & O, EPLI, Errors and Omissions and professional liability, etc. Yet, it is not uncommon to find that each of those different types of hazards may have a different definition of “claim,” and other provisions that could easily be standardized! How absurd is that?
I also expect that certain types of other hazards that don’t exist today will eventually exist and will need to be covered. Often, it will happen on a claims made basis.
Let’s not forget the basic concept, when a professional commits an error, no one is immediately damaged, and that damage may not be known for quite some time (medical errors being an exception). That is not necessarily true of other casualty risks such as slip and falls, collapsing bridges, where people are injured immediately. One thing is for certain, claims made policies are not going to go away and hopefully will evolve in a manner that not only continues to benefit the insurer, but provides coverage that any policyholder would reasonably expect to have.
In your experience, how does educating clients about their policies influence claim outcomes and client satisfaction?
It’s immensely important if you are an insurance broker, to go over the policy and make sure your client is educated about what they need to do and how they need to do it. Policyholders need to know that even if no claim or demand is made against them, yet they know they’ve committed an error or mistake that could later become a claim, they must report that immediately to the insurance company under the incident reporting provision a.k.a. Notice/Knowledge of a Potential Claim. A significant number of claims are denied because they did not do that. In other words, if you have to ask yourself “should I report this,” then you’ve already answered your own question. The broker needs to educate the policyholder on what events trigger the policy, or could trigger the policy and how to report it immediately. This is extremely important. Simply read the definition of “Claim.” It’s in every policy today.
Another important aspect discussed in the book is what happens if there’s a change in control of one’s business, by either acquiring or merging with another company, or being acquired themselves. Your insurance broker needs to know this long before the deal closes, so appropriate arrangements can be made as to the impact it may have on any claims made policy.
One thing is for sure, uneducated policyholders are going to have a lot of claims unnecessarily denied by their insurer.
With the insurance industry continually evolving, how can companies balance the need for innovative products with the necessity of managing risk effectively?
With better training and education internally, and a return to rapid claim development. The “bean counters” in management need to know that the Claims Department is not a cost center where expenses need to be cut, they are the profit center. If claims are developed earlier, they will be settled earlier and at a significantly lower amount than learning what one needs to know via the expensive alternative called litigation and Discovery. That’s the product! The product is NOT handing someone a policy they just purchased.
Looking back, what achievements are you most proud of, and what legacy do you hope to leave within the insurance industry?
I am most proud of the fact that I can honestly say I always tried to do the right thing, whether I was handling claims for insurance companies or as an insurance broker. Everything I have professed in the answers to these questions is something that I put into practice long ago and continue to do the same today. I believe in education and training, I believe in doing the right thing, and I still believe that the insurance industry is there to put the policyholder back in the position they were in before the loss. That is the very nature of insurance. Certainly, there have to be exclusions for certain types of functions such as intentional or illegal acts. Those were never insurable. But I do believe in doing the right thing, and that is, simply put, don’t look for excuses not to pay a claim. Don’t hire attorneys simply because they want to draft policy language so one can avoid paying claims that would normally be paid. But that is happening more and more, and I find that quite disturbing.
Read the full feature in IMPAAKT, the Top Business Magazine, exploring Frederick Fisher’s 50-year journey shaping the future of insurance.
