U.S. Remains Largest Liability Market: Businesses Face Rising Losses from Cyber, Environmental, Product Defect and Recall Risks, According to Allianz Report
Disruptive technologies, autonomous vehicles and growth of “sharing economy” present new loss scenarios while deer and bedbug claims continue to increase
“Liability losses are ubiquitous and can range from minor incidents to major disasters, always causing third party damage or injury,” says
The AGCS Global Claims Review analyzes over 100,000 corporate liability insurance claims from more than 100 countries, with a total value of
Top 10 global causes of liability loss by total value of claims |
||
1 |
Defective product/work | |
2 |
Collision/crash | |
3 |
Human error | |
4 |
Accidental nature/damage | |
5 |
Slips/falls/falling objects | |
6 |
Water/fire/smoke damage | |
7 |
Environmental damage | |
8 |
Natural hazards | |
9 |
Vandalism/terrorism | |
10 |
Property damage |
Trends
Impact of a defective product or work is the largest cause of loss, accounting for almost a quarter of the value of all claims (23%). The average loss costs businesses in excess of
“The number of recalls has been steadily rising with increased focus on product and workplace safety, as well as more proactive regulation,” says
Significant improvements in automotive and aviation safety may have reduced the number of collisions and crashes in recent years but these are still a major driver of liability losses, accounting for more than a fifth of the value of all claims (22%), as well as generating the most claims. Human error (19%) is the third top cause of loss, driven by incidents which result in major losses, such as aviation and shipping events or employee injury.
Larger losses more commonplace
Losses in excess of
The
Technology to drive big shift in liability losses
Digitalization and growing use of new technologies are likely to lead to a further shift in the liability risk landscape. Overall, the frequency of claims is expected to decline as trends such as autonomous driving improve road safety. However, technology will also bring new liability threats such as increasing cyber, product liability and recall risk.
Automation is likely to lead to increased product liability risk for machinery and component manufacturers and software providers. New data protection laws around misuse or breaches of data will increase cyber liability for companies, potentially resulting in heavy fines and penalties, particularly in
Animal Claims
Nearly two percent of claims analyzed involve animals. Deer incidents, particularly involving collisions with cars, account for 58 percent of animal-related liability claims and cost in excess of
Bedbug/insect incidents account for almost 30 percent of animal-related liability claims received by insurers, with the number of bedbug incidents on the rise in the
To access the full report, please visit here.
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