PolicyMakers Home

DEFENSE COSTS AND COST CONTAINMENT EXPENSES AS A PERCENT OF INCURRED LOSSES, 2009-2011 (1)

herer($000)
  2009 2010 2011
  Amount As a percent of
incurred losses		 Amount As a percent of
incurred losses		 Amount As a percent of
incurred losses
Products liability $1,029,911 86.2% $895,591 57.0% $1,140,722 73.4%
Medical malpractice 1,886,557 57.2 1,809,027 61.4 1,795,637 57.6
Commercial multiple peril (2) 1,799,507 43.7 1,880,945 44.7 1,897,812 37.6
Other liability 5,174,214 24.8 5,289,524 25.6 4,456,024 25.3
Workers compensation 2,407,144 10.8 2,492,866 11.2 3,089,083 12.7
Commercial auto liability 963,574 10.3 929,063 10.6 961,042 10.3
Private passenger auto liability 3,928,788 6.3 3,946,431 6.2 3,959,017 6.2
All liability lines $17,189,695 13.9% $17,243,447 13.8% $17,299,337 13.8%

(1) Net of reinsurance, excluding state funds.
(2) Liability portion only.

Source: SNL Financial LC.

COST OF U.S. TORT SYSTEM, 1990-2010

COST OF U.S. TORT SYSTEM, 1990-2010

U.S. FIRMS EXPERIENCING A LOSS OF $5 MILLION OR MORE, 2003-2007 (1)

U.S. FIRMS EXPERIENCING A LOSS OF $5 MILLION OR MORE, 2003-2007 (1)

GROWTH OF TORT COSTS, 1951-2007

Years Average annual change
in tort system costs
1951-1960 11.6%
1961-1970 9.8
1971-1980 11.9
1981-1990 11.8
1991-2000 3.2
2001 14.7
2002 13.4
2003 5.5
2004 6.0
2005 0.4
2006 -5.6
2007 2.1
57 years (1950-2007) 9.0%
Source: Tillinghast-Towers Perrin.

U.S. AVERAGE EXCESS LIABILITY LIMITS RELATIVE TO LOSS EXPERIENCE, 2004-2008

U.S. AVERAGE EXCESS LIABILITY LIMITS RELATIVE TO LOSS EXPERIENCE, 2004-2008

CASUALTY COST OF RISK PER $1,000 OF REVENUE, 2006-2007

CASUALTY COST OF RISK PER $1,000 OF REVENUE, 2006-2007

TYPES OF DIRECTORS AND OFFICERS LIABILITY CLAIMS, 2003-2012 (1)

TYPES OF DIRECTORS AND OFFICERS LIABILITY CLAIMS, 2003-2012 (1)

DIRECTORS AND OFFICERS LIABILITY CLAIMS BY TYPE OF CLAIMANT IN THE UNITED STATES, 2003-2012 (1)

DIRECTORS AND OFFICERS LIABILITY CLAIMS BY TYPE OF CLAIMANT IN THE UNITED STATES, 2003-2012 (1)

DIRECTORS AND OFFICERS LIABILITY CLAIMS BY BUSINESS OWNERSHIP, 2002-2011 (1)

DIRECTORS AND OFFICERS LIABILITY CLAIMS BY BUSINESS OWNERSHIP, 2002-2011 (1)

TRENDS IN EMPLOYMENT PRACTICES LIABILITY, 2005-2011

Year Median (midpoint) award Probability range (1)
2005 $179,750 $47,445-$500,000
2006 150,000 50,000-461,937
2007 175,082 53,300-650,648
2008 244,000 65,000-674,191
2009 207,235 60,000-600,281
2010 172,500 50,000-388,750
2011 325,000 105,500-621,000

(1) The middle 50 percent of all awards arranged in ascending order in a sampling, 25 percent above and below the median award.

Source: Thomson Reuters.

PREVALENCE OF EMPLOYMENT PRACTICES LIABILITY (EPL) COVERAGE BY OWNERSHIP, 2008

  No EPL Stand-alone EPL D&O with EPL
Nonprofit 17% 4% 79%
Private 17 36 47
Public 8 22 70

Source: 2008 Directors and Officers Liability Survey, Towers Watson.

POST-REFORM ACT SETTLEMENTS OF SECURITIES LAWSUITS, 1996-2012 (1)

  1996-2011 2012
Minimum $0.1 million $0.5 million
Median 8.3 million 10.2 million
Average 55.2 million 54.7 million
Maximum 8.3 billion 822.6 million
Total settlements $70.2 billion $2.9 billion

(1) Private Securities Litigation Reform Act of 1995; adjusted for inflation.

Source: Cornerstone Research.