The results, published in the "2001 Limits of Liability Report" found that commercial buyers dropped their limits by 6 percent over last year, going from an average of $101.8 million to $95.7 million in 2001.

Timothy P. Brady, managing director, National Casualty Practice for Marsh, said the results came as no surprise.

One interesting finding, however, was that organizations that experienced a loss of $5 million within the past five years continued to buy at a consistent level of limits. Those corporations that have not suffered similar losses were more likely to buy less coverage, Mr. Brady noted.

Insurance costs rose more than 31 percent on average for commercial clients, as of Jan. 1 this year, the report said. Health care costs are a major contributor to the cost of insurance for corporations, the report went on to say, and will have increased 50 percent over the past four years by the end of 2002, the report predicts.

The report is intended to be used by commercial insurance buyers as a guide to what others within their revenue index are buying, said Mr. Brady. It also shows to buyers that they need to be aware of the impact of future litigation and inflation.

He explained that, on average, a suit takes four years to reach a settlement. Insurance limits purchased today may not be enough to cover a settlement later on. Due to legal inflation and societal trends, Mr. Brady continued, a settlement made for $3 million today may be up to $7 million by 2007.

"The good news is that clients can purchase what they want," Mr. Brady said. "Capacity is not a restraint for most companies."

The report goes into the impact of litigation on wrongful death suits and how, globally, the world is becoming a more litigious place. The report makes observations of settlements in European countries and touches on the individual legal systems of 12 countries and parts of China and South Korea.

Also contained in the report are 2001's largest jury verdicts from "The National Law Journal" and large loss listings from XL Insurance Company, Ltd., based in Bermuda.

Copies of the report are available through local Marsh offices.