Recognizing the increase in consumer class-action lawsuits and the uncertainty over potential payouts, Marsh has launched a specialty insurance product that transfers a company’s known settlement exposure to the insurance market.
Class-Action Settlement Insurance, or CASI, offers up to $100 million in coverage for the monetary portion of an insured’s consumer class-action settlement. After establishing a settlement fund, a company pays a fixed premium and transfers the uncertainty and volatility of the ultimate payout to a global insurer.
The number of consumer class-action settlements more than doubled from 2010 to 2013, with total settlements ranging from betwe4en $1.7 billion in 2010 to $9.7 billion in 2012. Approximately 75% of these class-action settlements included monetary payouts to class members, according to NERA Economic Consulting, part of the Oliver Wyman Group, a wholly owned subsidiary of Marsh & McLennan companies.
It’s unclear whether the availability of insurance will encourage or discourage the plaintiff’s bar from pursuing consumer class-action cases.
More information on CASI can be found in the CASI brochure.
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Rosalie Donlon
Rosalie Donlon is the editor in chief of ALM's insurance and tax publications, including NU Property & Casualty magazine and NU PropertyCasualty360.com. You can contact her at [email protected].
