Massive claims and settlements are no longer a surprise to the insurance industry and casualty lines are no exception. Many will remember the collapse of Surfside, Florida’s Champlain Tower South in June 2021. It resulted in a settlement of more than $1B.

Nevada is taking a chance on a new law that’s upping the ante in the state’s admitted liability insurance market. The Silver State recently became the first to comprehensively ban widely used ‘defense within limits’ provisions from admitted liability insurance policies. Such provisions subtract defense costs from an insured’s available limits, effectively eroding coverage.

In June 2023, multinational industrial conglomerate 3M, reached a historic settlement with public water suppliers over the presence of polyfluoroalkyl and perfluoroalkyl substances (PFAS) in drinking water. The settlement concludes multiple class-action suits against the company. Under the settlement, 3M will pay $10.3 billion to plaintiffs over a 13-year period (source 1).

You might assume owning a bar would be all fun and games, but bars, concert venues, and other businesses in various locations across the U.S. are finding that’s not the case. Many have been forced to close their doors as the cost of liquor liability coverage rises. The price of liability insurance, including liquor liability, has been rising steadily across the country. A recent Council of Insurance Agents & Brokers survey found that in the fourth quarter of 2021 alone, medium-size businesses saw an average insurance premium increase of 10.6%; small businesses saw an average 6.3% percent rise with increases attributed to economic inflation, social inflation of jury awards, and other factors (source 2). The liquor liability market likely would have hit rocky ground sooner, but the pandemic slowed most businesses down and court cases ground to a halt. Now that courtrooms have returned to normal operations, drunk driving lawsuits are hitting with increased frequency and severity, which drives up insurance costs.

As the U.S. embarks on a nationwide infrastructure upgrade, a challenging casualty insurance market may make for a bumpy road. Millions of miles of roads as well as thousands of bridges and dams need repair across the country. A massive federal program aimed at addressing those needs is getting underway even as contractors face shortages of skilled labor and tight material supplies following the pandemic-related supply chain logjams. Social inflation is also generating other roadblocks as liability verdicts soar into the tens of millions of dollars. In the current legal environment, insurers have been pulling back on casualty coverage for public works projects, particularly those involving streets and roads, to limit their own exposure. As placements become more complex, experienced wholesale brokers with strong market relationships can be an invaluable ally for meeting insureds’ casualty insurance needs.