Source: https://www.propertycasualty360.com/, October 13, 2023
By: Jackie Neal

As first described by Warren Buffett in the 1970s, social inflation is “a broadening definition by society and juries of what is covered by insurance policies.” Noneconomic factors — such as how society perceives big business — are leading to larger jury awards, higher claim settlements and greater litigation expenses.

Social inflation first impacted insurers offering certain standard commercial lines. For example, claims against trucking companies resulted in nuclear verdicts affecting commercial auto insurers as early as 2011. By 2019, many insurance providers began recognizing social inflation’s impact on general liability and professional lines. Read more.