Classic Causes
If your first answer was slips and falls or other premises liability issues, you are correct. These classic causes of liability loss still occur frequently.
Rental properties are particularly prone to attract liability claims.
For more on common exposures and insurance considerations, see Common Liability Risks and Insurance Considerations.
Food Preparation and Processing
The second category is food preparation and processing, where the insurance industry is watching increases in reported claims. Some long-term issues tied to preservatives or other common chemicals remain a concern, and past scares show how persistent these worries can be.
Computers and Mass Communication
Computer- and communication-driven liabilities come in a strong third. Cyber-attacks, social media miscues and intellectual property litigation become more common daily.
The high cost to litigate and mitigate these computer losses combines to create a high-severity problem.
For related trends and loss causes, see Classic Causes of Liability Loss.
Professional Services and Management
Professional services and management claims occur with greater frequency, especially professional liability among lawyers and medical providers.
Employment practices claims, a relatively new source of liability actions, continue to increase and are likely to remain a concern.
Director and officers liability claims have increased substantially in recent years, and environmental claims can intersect with many other liability issues.
Notice that the claims trending greater frequency often have little to do with premises or basic operations; management, leadership, communications, computer interfaces and pollution are growing sources of claims.
Companies need to renew their risk management diligence in these areas and document their efforts carefully.
Employment practices claims can be reduced through clear procedures and training, including educating HR on handling harassment complaints and hostile workplace incidents.
Rules for company use of social media, email and text should specifically prohibit offensive content, and employees should be trained to recognize phishing and other online threats.
Environmental audits should be completed on an ongoing basis as needed, and documentation is critical.
Overall, risk management should consider increasing specific underlying coverage and umbrella limits to address these emerging exposures, and you may want to talk to your agent.
Frequently Asked Questions
How can I reduce employment practices claims?
Implement clear policies, provide HR training on harassment and complaint handling, and document investigations and outcomes.
What steps lower cyber and social media risk?
Use strong access controls, train employees on phishing and safe posting, and maintain incident response plans.
When should a business consider increasing umbrella limits?
Consider higher umbrella limits if you face rising litigation risk, operate online extensively, or handle sensitive customer data.
Are environmental audits necessary for small businesses?
Yes, periodic audits help identify pollution risks early and provide documentation that can reduce liability and insurance exposure.