Greenwashing poses a growing challenge in international liability insurance, driven by rising scrutiny of corporate ESG claims. Insurers must adapt quickly, ensuring greater clarity in coverage terms and staying alert to developments in this fast-moving space.

Pollution clean-up presents a challenge due to the complexity of legal responsibility, varying environmental regulations across jurisdictions and the costs involved. As environmental standards tighten globally, insurers must carefully assess their exposure, ensure wording clarity and navigate evolving liability risks tied to contamination, remediation orders and long-tail environmental damage.

Social inflation refers to the rising cost of claims driven by societal and legal trends rather than changes in the underlying risk. These trends make liability claims more expensive and harder to predict, challenging insurers’ ability to price risk accurately and maintain sustainable loss ratios. The International Liability Panel has tried to address measuring the impact of social inflation by developing the LMA International Bodily Injury Index.

As regulations tighten and expectations rise, organisations face greater scrutiny over their sustainability claims, raising the risk of misrepresentation, regulatory action or reputational harm. For insurers, this could mean adapting coverage, reassessing exclusions and ensuring policies reflect the evolving legal and social landscape around sustainability.

PFAS, or ‘forever chemicals’, present a significant challenge to the insurance industry due to their persistence, wide use and potential for causing health and environmental damage. As awareness of PFAS grows, insurers are increasingly facing claims and litigation related to these chemicals. While some policies may offer coverage, many now include specific exclusions for PFAS-related liabilities.