July 2024 Market Update - Commercial Liability

As foreshadowed in our January 2024 Market Update, increased competition and market capacity has benefited some policyholders as premiums stabilise for the general liability insurance landscape. The outlook for the next 6 months continues to appear positive. Some policyholders may experience steady renewal results dependant on their risk profile, industry classification and claims history.

Well performing and risk managed accounts may experience rate reductions. Industry sectors with elevated liability and ‘people’ risk (e.g. construction, education, mining, transport, manufacturing, retail, hospitality) may experience tempered rate increases between five to ten per cent. Business revenue, employee count, contractor/labour hire exposure and occupational geographical footprint is also a rating factor, with insurers displaying less appetite for USA exposed businesses given the heightened litigation risk presented in that region. Mounting litigation costs and claims inflation continue to concern insurers and in particular, the rise of per- and polyfluoroalkyl (PFAS) exposures which are presenting significant losses for companies across a wide range of industries.

PFAS-related claims may also intersect and implicate other types of insurance such as environmental pollution legal liability policies which capture coverage for sudden and accidental pollution incidents, third-party property and bodily injury claims including cleanup costs ordered by EPA authorities for damage caused by the pollution.

Policyholders purchasing this coverage should implement appropriate internal risk management controls to curb potential losses. Businesses ought to consider establishing robust measures to mitigate workplace injuries including OH&S/WHS breaches and, address PFAS exposures by implementing policies and procedures to minimise exposures and ensure compliance with relevant work health safety legislation.