Chubb’s 2024 Liability Limit Report: Essential Trends
Chubb’s recently issued 2024 report on Liability Limits and Large Loss Profile offers valuable insights into liability trends across different industry sectors. This article summarizes some key points from the report and how they could impact insurance professionals in Massachusetts.
Trend in “Nuclear Verdicts”
The report emphasizes a surge in “nuclear verdicts” – settlements and awards exceeding $10 million. These verdicts escalated from $4.9 billion in 2020 to $18.3 billion in 2022, marking a 273% surge across ten industry sectors. This trend indicates an increasing threat of high-value liability claims.
Changes in Purchased Liability Limits
Despite the rise in verdicts, the report observes a decrease in liability limits acquired by businesses across most sectors:
Construction: 44% lower in 2023 compared to 2014
Healthcare: Down by 31% in 2023 compared to 2014
Consumer Products: Reduced by 28% in 2023 compared to 2014
Only the utilities sector exhibited growth, with coverage increasing by 9% since 2014.
Factors Impacting Liability Risks
The report highlights factors that contribute to the rise in liability-related loss costs:
Third-party litigation funding, valued at $18.2 billion in 2022 and projected to grow at a rate of 13.2% until 2028.
Shifting views towards businesses and corporations.
Emerging risks include climate change, geopolitical issues, and concerns regarding data privacy.
The impacts of the pandemic led to a backlog of cases and an increase in litigation expenses.
Highlighted Cases
The report mentions notable legal cases from 2023:
A $112.2 million award for damages related to a flooded factory.
An $11.6 million settlement was granted to a train engineer who suffered heat exhaustion.
A $1 billion verdict in a case involving negligence by a truck driver.
An $800 million settlement related to a mass shooting incident.
Relevance for Insurance Professionals in Massachusetts
Given Massachusetts’ emphasis on healthcare, education, and technology sectors, local insurance professionals should closely monitor liability trends within these areas. The industry-specific insights provided in the report could assist with risk evaluation and client consultations.
Considerations for Insurance Coverage
The report indicates that determining liability insurance coverage remains a complex task. Factors to take into account:
The potential financial repercussions of losses
Impact on brand reputation and stock prices
Cost considerations
Ways to increase self-insurance coverage
The Role of Insurance Companies and Brokers
As per the report, insurance providers and brokers can help businesses evaluate their liability insurance needs. This might involve exploring specialized coverage options like punitive damage wraps for added coverage certainty.
In Summary
Chubb’s 2024 Liability Limit Benchmark & Large Loss Profile report presents a comprehensive overview of liability trends in different sectors. For insurance professionals in Massachusetts, the report offers valuable data and insights to guide client conversations and risk evaluation strategies. The complete report can be accessed for free on Chubb’s website by clicking HERE.
