With more people staying at home following the outbreak of the coronavirus pandemic, and with the temporary closure of many shops, airports and businesses, notifications of slip and fall incidents, which are one of the major causes of liability claims, have slowed recently. There has also been a positive impact on claims activity in the US from the suspension of courts and trials. Some claimants and plaintiff attorneys have been more open to negotiated settlements, some of which have been on more favorable terms.However, the liability insurance market could see claims brought by third-parties for injury or property damage due to failure to adequately protect against the coronavirus, as well as employee action against employers who did not appropriately protect their employees.Product liability and recall claims tend to follow economic activity, so there will most likely be any impact on claims with the economic downturn. Coronavirus also could affect claims through changes to hygiene and working practices, while restarting production after periods of hibernation may give rise to human error incidents.

“Pricing trends have turned, however claims trends and large court verdicts continue. This combined with expanded exposures for non-US companies doing business in the US and an increase in automotive parts recalls are putting pressure on liability insurers,” says Ciara Brady, Global Head of Liability at AGCS.

“We are seeing capacity decreasing globally which, when combined with social inflation, soft pricing and broadening covers globally during the soft market, is leading to the hardest market conditions since 2001. Overlay this with the uncertain economic outlook, political instability and unknown impacts from coronavirus and this is creating a challenging market for brokers, clients and insurers alike,” adds Brady.