Companies are experiencing exponential increases in the number of lawsuits and need protection.
In India, businesses are experiencing an increase in the number of lawsuits that are filed against them, at a rate of 30 to 40 percent per year, which has caused companies to flock to their insurers to purchase liability insurance.
This has boosted demand in that sector at a staggering rate, with an estimated growth of 10 to 20 percent annually.
Among the more popular forms of liability insurance that businesses are purchasing include credit, director and officer (D&O), environmental, clinical trial, product, public, and employment policies. Within the country, the sector is still within its infancy, but the trend toward suing companies has allowed it to suddenly take off.
This has caused many to believe that liability insurance will become one of the more important niche coverage forms.
According to the Bajaj Allianz General Insurance chief marketing officer, Anamika Rashtrawar, “It will never be a major line of business such as property or health, but would occupy a niche space in the market.” Currently, that company holds approximately 10 percent of the country’s liability insurance market, according to Rashtrawar.
It is being predicted that new products such as cyber liability insurance may also soon see a sudden rise.
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According to Mukesh Kumar, the HDFC ERGO General Insurance head of strategy planning, human resources and marketing, liability insurance makes up only 2 percent of the overall general coverage market, at the moment. However, he also pointed out that this product is also the most rapidly growing.
Kumar stated that among the various liability insurance coverage products, it was D&O that was taking off at the fastest rate. He explained that “With both Indian regulators, as well as various international ones being very aggressive in investigations and the media carrying out scrutiny, awareness on D&O policies has been on rise.”
He then went on to add that “Among the products for which we are seeing increased traction is the crime policy, which responds to employee fraud, among other risks.” This makes liability insurance particularly relevant in the business environment in India today.