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For the past several years insurers have cut back the liability limits they offer most insureds. Youth Organizations have been particularly impacted by this and now we understand that the one of the few remaining camp insurers in the country is limiting excess liability coverage to just $3 million. And this comes at a time when you need excess liability insurance more than ever. Consider this:
- Social inflation where a claim paid five years ago for $3 million, may settle for $5 or even $6 million today. What is causing this:
- Large awards are now so common the public is desensitized.This drives up jury awards.
- Negative public sentiment. Most jurors now believe organizations cut back on safety to save money.
- Attorneys – constant TV and Social Media advertising, emotional appeals and ‘venue shopping’ for the most favorable courts in which to sue you.
- Litigation funding where claimants can get their claims paid now at a lower amount by a hedge fund who assumes their fight in court for the bigger payout.
- Skyrocketing healthcare and medical care costs, and nursing shortages drive up costs to settle claims.
- Standards of care continue to rise. Expectations from your clients, associations, and regulators as well as court precedents continually raise the bar.
- Reviver statutes that increase or eliminate the statute of limitations for a claimant to sue you have been enacted or are being considered in almost every single state.
- Insurance cases litigated in federal court increased 30% in 2022 alone.
- Peer to peer incidents of abuse have exploded over the past few years, and parents rarely hesitate to bring legal action in such cases.
The old adage says that you only get sued for the amount of your liability insurance. Unfortunately, many claims are settled well in excess of insurance limits. Here are the facts for abuse claims:
- The average claim settlement over all organizations is $8,198,969 and the largest is $120,000,000. (*)
- For Youth Organizations, for the years 2000-2009 to 2010-2019 the number of payouts went from 255 losses to 864 losses, and the average payout went from $11.9 million to $21.8 million. (*)
What should you do about this? Do not simply accept lower limits of liability. Seek alternative advice from Camp insurance experts and get alternate quotes. We have insured summer camps for over a century and our insurer is not limited to $3 million for qualified insureds. For a no cost, no obligation quote or consultation contact Michael Labadorf CPCU, Executive Vice President 516-247-5850, or Michael.Labadorf@bbrown.com.
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