Nuclear verdicts – jury awards that far exceed typical compensation – pose a major challenge in this class of business. Driven by social inflation, public sentiment and plaintiff strategies, these awards make assessment more complex and push underwriters to reassess risks to better manage this growing threat.

Litigation funding is an emerging issue, as third-party investors increasingly finance lawsuits in exchange for a share of any settlement or award. This external capital fuels more (and often more aggressive) litigation, extending case duration and raising settlement values. The lack of transparency around funding arrangements also makes it harder to evaluate risk and exposure, creating a growing challenge for underwriters and claims teams alike.

Tort reform varies widely by state, creating an uneven legal landscape. In some jurisdictions, reforms are being rolled back or challenged, contributing to rising claims severity and unpredictability. For insurers, this inconsistency complicates underwriting strategy and pricing, making close monitoring of legal developments essential to managing long-tail liability risks effectively.

PFAS and plastics litigation poses a growing challenge due to increasing legal and regulatory scrutiny around environmental and health risks. The long-tail nature and potential scale of liability make it a significant emerging exposure for underwriters.

Both construction and transport industries face significant risks, including property damage, worker injuries and third-party liabilities. The dynamic nature of these sectors, with increasing project scales and freight volumes, requires insurers to assess risks carefully. Effective coverage must account for safety standards, regulatory compliance and evolving market demands.