MARKET OVERVIEW
ERRORS & OMISSIONS INSURANCE
Addressing Coverage Gaps for Complex E&O Exposures
Key Takeaways
SAM Insurance coverage — once routinely included in package policies — is now often excluded sublimited or priced with high
Exposure is not limited to nonprofits or direct care providers; any organization may be contractually obligated to carry SAM
Introduction
In today’s litigious liability landscape, one area of coverage is becoming increasingly difficult to secure and more essential than ever: Sexual Abuse and Molestation (SAM). Once a standard inclusion in Commercial General Liability (CGL) and Professional Liability, also called Errors & Omissions (E&O) policies; SAM coverage is now frequently excluded, restricted to lower limits, or only available with high premiums and deductibles.
Market Pressures & Legislative Drivers
A rise in the frequency and severity of SAM-related claims is driving the need for comprehensive SAM coverage. Payouts in this space can be significant — even from a single claim — often reaching millions of dollars. The frequency and severity of these claims have far outpaced the premiums traditionally charged, exposing a major gap in standard market pricing models. In some cases, carriers have collected as little as $2,000 in premium but faced million-dollar payouts. As a result, many standard carriers have exited the space, citing a lack of pricing adequacy and expertise, forcing much of the business into the Excess & Surplus (E&S) market.
In addition, legislative changes in many states are extending or removing statutes of limitations, allowing survivors to bring claims years after the alleged incident. For example, in April 2025, Los Angeles County reached a $4 billion tentative agreement, the largest in U.S. history, to settle more than 6,800 sexual abuse claims dating back to 1959.
Simultaneously, demand for SAM coverage is increasing, particularly at the local level. Municipalities, schools, elder care facilities, special needs housing, child and adult day cares, hospitals, and other organizations that serve vulnerable populations need substantial SAM coverage and may also now require proof of SAM coverage from their contractors and vendors. However, any business or organization is at risk of a SAM claim, from corporate offices to transportation providers.
The result is a significant Professional Liability Insurance gap, as SAM coverage options become more limited, creating both risks and opportunities for brokers and agents. With the market shrinking and insurers tightening their underwriting requirements, brokers and agents who can offer access to specialized solutions will be able to meet the growing needs of their clients.
Financial & Reputational Risks
According to the Centers for Disease Control and Prevention, at least 1 in 4 girls and 1 in 20 boys in the U.S. experience child sexual abuse — a figure that may be underestimated, as these incidents are often underreported. The shift to virtual oversight in some care settings — such as remote home inspections introduced during the COVID-19 pandemic — has also introduced new vulnerabilities that may be harder to detect without in-person evaluations.
A SAM allegation — even if proven untrue — can be devastating, especially for nonprofits, schools, and care organizations that operate on limited budgets. Settlements can range from tens of thousands to millions of dollars per claimant.
The right SAM Insurance coverage not only protects against financial loss but also enables an organization to respond swiftly and credibly when allegations arise, helping preserve its mission and reputation. Services may include crisis response protocols and employee guidance for handling sensitive situations.
SAM Insurance can also offer vital risk management support to help organizations prevent incidents, such as background screening tools, abuse prevention webinars, and more. These resources can guide organizations through key steps before, during, and after an allegation, helping to minimize harm and ensure consistent, compliant responses. Effective use of these tools is critical, especially when working with vulnerable populations.
Now more than ever, brokers must act proactively to educate their clients on the importance of securing SAM coverage. Waiting until a claim arises, or a contract requires proof of coverage leaves organizations and businesses exposed.
How Burns & Wilcox Can Help
Burns & Wilcox is uniquely positioned to help organizations of all sizes secure coverage for this challenging risk. Our Professional Liability Practice Group provides access to Lloyd’s and other specialized markets offering SAM coverage, giving brokers and agents the flexibility to customize solutions that best address their clients’ needs.
Our deep understanding of local ordinances and market expectations ensures that coverage is tailored to meet specific risk profiles. Additionally, our consultative approach helps brokers navigate complex coverage requirements, ensuring their clients remain protected.
Our team also brings underwriting insight to help place hard-to-insure classes like adoption and foster care, where available limits are often low, and multiple markets may be needed to meet contractual requirements. We know which carriers will consider these risks and how to structure layered programs effectively.
Tips for Brokers Agents
By staying ahead of liability trends, brokers and agents can help clients secure the protection they need.
#1 Start the conversation early.
Educate clients on the shifting SAM landscape before coverage is mandated or a claim occurs.
#2 Assess exposure thoroughly.
Whether they work with youth, seniors, or disabled individuals, underwriting requirements and premiums vary significantly.
Even if a client has no prior claims, incidents can still arise. Consider all aspects of their operations, staff training, and vendor relationships.
#3 Know your client’s population.
In high-risk classes of allied health and social services, securing required limits may necessitate multiple carriers and layered coverage.
#4 Prepare for stacking coverage.
#5 Document and track requirements.
Understand all contractual obligations related to SAM coverage and help clients remain compliant.
#6 Emphasize reputational stakes.
Coverage provided in General Liability or package policies may no longer be sufficient. Turn to experts — like the Professional Liability Practice Group at Burns & Wilcox — to access tailored SAM solutions.
SAM coverage is not only about liability it is about preserving trust and brand integrity.
#7 Partner specialized wholesalers.
Comprehensive SAM coverage is needed now more than ever. Contact Burns & Wilcox today to learn more about how we can help protect your clients — and the communities they serve.
Contributors
Andy Wood
Senior Vice President
Professional Liability
Burns & Wilcox, Chicago, Illinois
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Rahmad Bauldrick
Vice President
Regional Practice Group Leader, Professional
Burns & Wilcox, Chicago, Illinois
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This commentary is intended to provide a general overview of the issues contained herein and is not intended, nor should it be construed, to provide legal or regulatory advice or guidance. If you have questions or issues of a specific nature, you should consult with your own risk, legal, and compliance teams.
