MarshÃ¢â‚¬â„¢s latest annual Limits of Liability report is out. The report surveys the excess liability insurance buying patterns of a huge number of firms (7,265) from 58 countries. Perhaps not surprisingly, the historical results of the report suggest that companies buy higher limits when prices are down, and lower limits when prices are up. But as Marsh notes, itÃ¢â‚¬â„¢s all a question of balance: managements need to weigh the cost of average coverage against the companyÃ¢â‚¬â„¢s realistic exposure to a catastrophe.
This yearÃ¢â‚¬â„¢s study reveals that for the third consecutive year, the average price for $1 million of liability coverage among U.S. firms declined, falling by 4.6 percent to $11,348 in 2007, compared to $11,895 in 2006. After three years of price decreases, costs in 2007 fell to 2003 levels, providing some relief from the steady price increases of previous years. The largest U.S. firms in the study Ã¢â‚¬“ those with revenues exceeding $10 billion Ã¢â‚¬“ purchased limits of $288 million on average, the greatest amount of coverage of all firms. Check out further I.I.I.Ã‚ factsÃ‚ & statsÃ‚ on litigiousness.