Better insurance industry practices and clearer professional indemnity policies are two trends to emerge from the economic turmoil of the past 12 months.

DLA Phillips Fox partner David Leggatt told the Australian Insurance Law Association national conference last week that insurers are starting to find the right points on exclusions.

He says this is giving insurers some stability, because reasoned denials of indemnity are being supported in the courts.

Current court cases in the US involving credit ratings agencies are being closely watched, as the agencies’ potential liability for negligent mis-statements on ratings for special purpose investment vehicles is being put to the test.

“The writing will be on the wall for ratings agencies if they are found liable for providing ratings without a reasonable basis,” Mr Leggatt said.

“There’re not a balance sheet big enough in the world to cope with the liabilities that are going to arise if that turns out to be the case.”

He told insuranceNEWS.com.au some form of government intervention is likely if the agencies avoid liability.