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Liability & Casualty

Marsh’s construction practice experts give their insight into liability and casualty and capacity changes on a global and regional basis during Q1 2024.

General / Public liability 

The general liability market remained competitive for most risks. Additional capacity emerged in many regions, allowing for greater competition.

Globally, rates showed a mixed picture, with increases in the US (0% to 10%), the Pacific (5%), and Europe (8%), while Canada and Asia showed rates stabilizing. Available market capacity in the Middle East and Africa was a driver of rate decreases.

Abundant capacity in Asia means most risks are over subscribed, while in Spain, for instance, greater capacity has led to rate reductions in annual programs.  

Underwriting appetite and capacity have increased among London insurers, although this was observed mostly for primary layer placements in the UK, where worker-to-worker injuries are a concern. 

Workers’ compensation 

Workers’ compensation remained stable and predictable for most contractors globally. Rates have generally ranged from -5% to 5%.  

In the US, these percentages include employer’s liability considerations as well.

Due to the high-risk nature of the construction industry, some countries in Latin America and the Pacific have seen premium cost increases for workers’ compensation driven by higher claims.  

In contrast, several countries in the Middle East, including Saudi Arabia, experienced downward rate trends. 

In Asia, the competitive rate environment continued with the majority of loss sensitive renewals coming in at a flat rate, and otherwise ranging between the -10% to 10% rate thresholds.

Employer’s liability 

The employer’s liability market remained stable in Canada, IMEA, and the UK, where rates trended toward flat on exposures for well-managed risks.

Umbrella and excess liability

Capacity generally returned to the umbrella and excess casualty markets. The London market saw new entrants. In Canada, capacity was typically redeployed from existing markets.  

Markets in the Middle East and Africa experienced abundant capacity, with a positive impact on rates for clients. 

The increasing frequency and severity of large verdicts and losses in the US are driving rate increases. Rates increased in the US in the 5% to 20% range, rose in the UK by 5% to 10%, and declined an average of 5% in the Middle East. 

Auto liability 

The auto liability market experienced rate increases in the US, Canada, and several countries in the Middle East and Africa, including the UAE (5% to 10%) and South Africa (10% to 15%). In Asia, auto liability rates were typically competitive across the region, with pricing decreases experienced in a number of countries. 

Environmental pollution 

In general, markets in Asia, Canada, the Pacific, and the UK remained stable, with capacity readily available, including from new entrants. Rates were generally flat in most regions yet decreased in Europe, were flat or increased in the 2.5% to 5% range in the Pacific, and typically increased in the US in the 2.5% to 10% range.

Capacity in the US environmental pollution market remains robust. Increased uptake continues for both practice and project programs, with the market tighter for projects with terms longer than 10 years. Occurrence coverage is available for many organizations. Certain higher risk operations may require a claims-made form. 

Controlled insurance programs (CIPs) 

Available in the US only

In the US, primary general liability rates were generally flat or decreased in the mid-single digits
(-5%). Capacity increased due to several new entrants and strong competition among insurers. 

Some insurers offered admitted options and supported leads. 

Excess market capacity remained abundant and available for most project risk scopes and jurisdictions. However, some insurers pulled back on available capacity, taking the total available down from US$25 million to US$12.5 million. 

Excess and surplus (E&S) market capacity remained plentiful and can provide retention options as low as US$50,000 in some cases for favorable risks. 

Workers' compensation rates typically ranged from -5% to +5%.  

With an increase in infrastructure projects and funding, insurers generally considered longer project terms and offered break-in review options. 

Capacity for all CIP options remained limited with admitted markets. Insurers typically require deductibles of US$250,000 or higher. 

Global construction market update

Global macro trends point to an encouraging outlook for the construction sector.