Business liability insurance keeps getting more expensive partly because of ever-higher jury damage awards and third-party litigation funding. That's the main finding of a new report from insurer Chubb.

Despite the trend, companies are "underestimating the amount of liability coverage they need," the insurer writes.

In all forms of construction, median 2023 insurance limits purchased—the maximum payout—were 44% lower than those bought in 2014.

The industry classifies any jury damage award over $10 million as a nuclear verdict. One of the largest last year involved a deadly 2019 Texas tower crane collapse with a jury award of $860 million.

Chubb reports on liability limits and large losses each year so that companies can build insurance "towers"— umbrella and excess insurance policies that kick in when general liability policy limits are exhausted.

Opaque financing by third-party investors seeking a portion of plaintiffs’ recoveries continue to rise, Chubb states. The insurer says the market for such cases was valued at $18.2 billion in 2022 and is forecast to grow steadily, according to industry research.