Sky-high jury awards and growing public scrutiny are changing the landscape of liability risk for businesses. Insurers are now seeing online reputation as a significant factor in assessing risk. This shift means that brokers need to create credible stories about their clients, or they risk losing coverage options.
The issue is not just about large verdicts; it’s also linked to a rise in employment disputes across various sectors. A recent survey found that 34% of corporate counsel reported a rise in employment litigation over the past year. Many legal departments are feeling the pressure, with 80% worried about large jury awards and 82% finding it harder to settle claims early due to rising costs and regulatory challenges.
Natalie Golubski, a professional lines broker at Jencap, has observed these changes closely. With almost ten years of experience, she emphasizes that the perception of a company can be just as crucial as the actual risks it faces. She points out that public figures face greater exposure, and juries are increasingly awarding large sums based not only on damages but also on a sense that companies can afford to pay.
Golubski explains that this trend reflects a broader public sentiment. Companies must be aware that their public image is now a key risk factor. Insurers are looking closely at businesses’ websites and social media to find any discrepancies between what companies claim and how they present themselves online. This scrutiny means that brokers must also be diligent in their assessments.
Even businesses that don’t often make headlines need to pay attention to their public image. Golubski warns that underwriters are now considering platforms like Facebook and Glassdoor in their evaluations. Any inconsistencies can lead to serious consequences, especially as insurers tighten their terms.
Mid-sized firms should not feel safe from these changes. While larger public companies are facing stricter underwriting, private businesses and nonprofits are also at risk. Golubski notes that while the changes may not be as drastic yet, sub-limited exposures based on litigation outcomes are likely to emerge.
Regulatory issues, which previously went unnoticed, are now being highlighted in underwriting assessments. Companies must be prepared for a more proactive approach from insurers. Despite these risks, many businesses are still hesitant to report incidents. They often fear that doing so will lead to higher premiums or even non-renewal of their policies.
Golubski recounted the story of a small business owner who thought that having an updated employee handbook would protect him from liability. However, when an EEOC claim arose, he realized that he was unprepared. This highlights the importance of being proactive about insurance and understanding potential exposures.
For brokers, the focus should shift from simply placing coverage to telling a compelling story about their clients. Golubski encourages a narrative-driven approach when dealing with underwriters. Building relationships is key; it’s not just about sending an email. In a world where scrutiny is high, brokers must remain credible and connected. Honest conversations are essential in this evolving landscape.