Travelers 2003 Annual Report Download - page 75

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73
Legal fees are also a part of the insured costs covered by liability policies and can be significant, sometimes greater
than the cost of the actual paid claims.
Examples of common risk factors that can change and, thus, affect the required general liability reserves (beyond those
included in the general discussion section) include:
General liability risk factors
Changes in claim handling philosophies
Changes in policy provisions or court interpretation of such provision
New theories of liability
Trends in jury awards
Changes in the propensity to sue
Changes in statutes of limitations
Changes in the underlying court system
Distortions from large single accounts or single issues
Changes in tort law
Shifts in law suit mix between federal and state courts
Changes in claim adjuster office structure (causing distortions in the data)
General liability book of business risk factors
Changes in policy provisions (e.g., deductibles, policy limits, endorsements)
Changes in underwriting standards
Product mix (e.g., size of account, industries insured, jurisdiction mix)