Timothy P. Brady, managing director, National Casualty Practice for Marsh, said most results came as no surprise. But one interesting finding was that organizations that experienced a loss of $5 million within the past five years continued to buy at a consistent level of limits, he said. Those corporations that have not suffered similar losses were more likely to buy less coverage, he said.

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, predicting that health care costs will have increased 50 percent over the past four years by the end of 2002.

The report is intended to be used by commercial insurance buyers as a guide to what others within their revenue index are buying, Mr. Brady said.

It also shows buyers that they need to be aware of the impact of future litigation and inflation, he said. On average, a suit takes four years to reach a settlement, he said. Insurance limits purchased today may not be enough to cover a settlement later on, he said, noting that with legal inflation and societal trends, a settlement made for $3 million today may be up to $7 million by 2007, he said.

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

The report also describes global litigation trends and the legal systems of more than a dozen countries.

With the inclusion of overseas firms, more than 3,500 corporations participated in the survey.

Referencing information on 2001s largest jury verdicts from “The National Law Journal,” which is also contained in the report, the study notes that there were less verdicts reaching $100 million in 2001 than in 2000. The report attributes this finding to the events of 9/11, which postponed many jury trials and slowed down the legal process.

But juries are still handing out substantial verdicts, the report went on to say, noting that awards of $20 million or more have tripled.

Copies of the report are available through local Marsh offices.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, August 26, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.