2008 Liability Trends: Emergent Liabilities: Catastrophe Hidden in the Everyday Risk
This paper explores three areas where risk has unexpectedly snowballed, creating substantial liabilities where once there were none. These examples underscore the significant financial exposure that can erupt in unforeseen places, putting consumers and the public at risk and wreaking financial havoc on businesses and industries around the globe. It also spotlights the growing complexity of liability exposures. Today, it is not uncommon for risks to involve political and social considerations as well as an international cast of potentially responsible parties. The three areas discussed are foreign imports, with a focus on China; liability in the food supply; and premises liability. The report concludes that a carefully crafted and appropriately high tower of excess liability insurance remains the most effective way for companies to shield their assets and their shareholders against the potentially catastrophic financial impact of U.S. civil liability lawsuits. Some of the most pressing issues to consider when buying excess liability insurance are examined. They include: how much liability coverage is enough? Is the insurer financially strong enough to take on the risk long term? What claim and litigation resources support the policy? Are terms reasonable? Can limits be eroded by third parties?
The authors of the report are Robert Hartwig, President, Insurance Information Institute; Steven E. Lessick, Vice President, Issue Management, AIG Domestic Claims; Bruce D. Margolin, Vice President, Issue Management, AIG Domestic Claims; Alan M. Maxwell, Weinberg, Wheeler, Hudgins, Gunn & Dial; Timothy J. McAuliffe, President, AIG Excess Casualty; Richard Woollams, Senior Vice President and Chief Claims Officer, AIG Commercial Insurance.
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