Costs of liability coverage dropping, Marsh study finds

While the costs of liability coverage have been dropping, businesses on average have maintained their level of coverage, says a global study by Marsh Inc.
The study surveyed 7,196 companies 562 of which were Canadian — in 53 countries. Findings are based on insurance-purchasing decisions made during the 12-month period ending Mar. 31, 2006, says a Marsh release.
On average, firms based in Canada and Europe purchased average limits of US$36 million, American firms US$66 million and Asian firms US$27 million.
Firms that experienced losses of US$5 million or more in the past five years are far more likely to purchase significantly higher limits of coverage, the study found.
Researchers point to American firms that have sustained larges losses in the past five years as an example. Such U.S. firms purchased, on average, limits of US$220 million almost four times the level of protection that was bought by those without such losses.
For the second consecutive year, reports Marsh Inc., the average price for US$1 million of coverage among the American firms in the study fell to US$11,895 in 2006, compared to US$13,222 in 2005.
Researchers noted the 2006 cost still represents an increase of 153% since 2000.