In April 2020, nearly 21 million jobs were lost in the U.S. as the coronavirus pandemic took an immediate and devastating blow to the domestic and global economy. Despite improvements over the past two years, business owners all over the U.S. are struggling to fill job vacancies. Fast forward to March 2022, and a record 4.5 million people in the U.S. quit their jobs, an increase of 3.0% since March 2021, according to data released by the U.S. Department of Labor.

The pandemic has changed how the workforce thinks about their lives and their jobs and they are hesitant to return. This self-reflection has been dubbed “COVID clarity," where Americans are prioritizing work-life balance—with the life portion taking precedent.

Amid the phenomenon known as the Great Resignation, workers continue to leave their jobs, which is also partly in response to increased mobility in the labor market as job openings strongly outnumber those looking for work. For many business owners, the current labor market is creating various professional liability insurance exposures.

“Finding quality qualified workers is going to be a very interesting issue for the next five years," says Manny Cho, executive vice president, executive lines, RPS. “People moved during COVID-19 and they've made a lot of changes in their personal lives."

The impact will be felt by companies that “aren't able to keep and maintain a good professional workforce or maintain the skill set," Cho explains. “This could absolutely have a material impact on a company. And in the longer term, that would be something that we would ask about on the professional liability side."

For many companies, ensuring their current employees are not overburdened or overstretched is essential in preventing errors. “Companies need to make sure their product or service isn't suffering as a result of workers becoming overextended due to lack of staff or due to inexperienced staff being brought in to account for other employee departures," says Paul Melone, senior director, professional liability, Markel. “This can open up exposures for clients."

Further, many businesses had to make adjustments to the delivery of products and services over the past two years. “With the shifting dynamics in this current environment, we have seen new exposures as a result of how people are working," says Sarah Medina, president, professional liability, The Hanover. “Many are incorporating new or modified processes, as well as additional services beyond their traditional areas of expertise."

A lingering effect of the pandemic and a major feature of the coronavirus pandemic has been remote work. With teams spread out across the country, “the biggest challenge is having your quality control and your work processes in place so that the work is done in a smooth fashion," Cho says. “Instead of offices being next to each other, they're numerous miles away. As employers want employees back [in the office], I think that will be challenging, not as much from a professional liability perspective, but more from an employment practices liability exposure."

A vital part of employees working from home is their ability to keep data protected. “The main concern agents should discuss with home-based business clients is the insured's ability to keep their business and data, as well as the data of their clients, protected," Melone says. “Some professional liability and cyber coverages can provide value here but there also needs to be proper investments in security infrastructure to make sure they are taking measures to address these exposures."

“Small and home-based businesses are generally more likely to experience an event that exposes data or shuts down their operation," Melone adds.

“The pandemic has really emphasized the evolving nature of the professional liability risks facing small businesses," Medina says. “Professional liability can be a very complex coverage, and one that can be easily overlooked by businesses, but the good news is independent agents can deliver real value in helping these clients understand just how much they have at risk."

Olivia Overman is IA content editor.