The Hidden Challenges of Liability Claims—and Proactive Ways to Mitigate Them

October 23, 2025 / 3 min read

In light of today’s fast-moving and increasingly complex risk environment, some industry watchers are likely to view liability claims management as having evolved from a transactional process into a strategic discipline. Claims leaders are navigating a convergence of pressures that demand both speed and precision. Talent shortages, fraud, regulatory scrutiny, and rising medical costs are reshaping how insurers manage claims, evaluate exposure, and deliver on their promise to policyholders.

coworkers collaborating

Understanding these challenges and responding with innovation, insight, and technology is now central to achieving operational excellence and financial resilience. This article explores the critical issues shaping the liability landscape and how Verisk can help insurers stay ahead.

The great resignation

The insurance industry is facing a quiet crisis: a growing shortage of claims adjusters.^[1]While the broader workforce continues to feel the effects of the Great Resignation, the claims profession is experiencing a particularly acute talent drain. Between retirements, shifting career preferences, and technological disruption, the role of the adjuster is rapidly evolving—and in some cases, disappearing. The impact of the Great Resignation has led to an influx of inexperienced adjusters and a significant loss of institutional knowledge.^[2]This shift underscores the urgent need for robust onboarding programs, continuous learning initiatives to bridge the expertise gap and the use of AI.

Consideration Tip: Streamlining workloads through technology can bridge this gap. Implementing AI-powered claims review tools helps reduce manual tasks and enables adjusters to focus on higher-value decision-making and customer engagement.

Rising litigation and legal complexity

Liability claims are becoming more contentious and legally intricate. Claimants are generally better informed and quicker to seek legal representation, driving up litigation rates and settlement costs.^[3] Evolving tort environments, nuclear verdicts, and increased data transparency only add to the complexity.

Consideration Tip: Early, transparent communication with claimants may help prevent misunderstandings. Establishing clear documentation and offering alternative dispute resolution (ADR) options like mediation may potentially reduce the likelihood of litigation.

Fraud and exaggeration

Fraudulent claims—ranging from staged accidents to exaggerated injuries—continue to strain resources and inflate costs.^[4]For example, property damage claims may involve inflated repair estimates, while bodily injury claims can include unnecessary or excessive medical treatments.

Consideration Tip: Integrate data analytics and fraud detection systems to identify anomalies. Proactive collaboration between claims teams and Special Investigation Units (SIUs) may strengthen early detection and containment.

Regulatory pressure

The regulatory landscape is constantly shifting. Compliance obligations around data privacy, reporting, and fair claims practices are intensifying. Non-compliance carries steep penalties and reputational risks that can erode customer confidence.

Consideration Tip: Maintain a compliance-first culture through continuous education and technology-enabled monitoring. Regular internal audits and real-time reporting capabilities can help ensure adherence and readiness for regulatory change.

Medical cost inflation

Medical inflation remains one of the most persistent challenges in bodily injury claims. Rising healthcare costs, inconsistent treatment patterns, and prolonged recovery timelines are driving unpredictable settlement values.^[5]

Consideration Tip: Insurers may wish to consider using nurse case managers or third-party medical review services to evaluate treatment plans. Structured settlements and negotiated provider rates can help manage long-term costs.

How Verisk Can Help

Liability claims management today requires more than expertise; it demands actionable data, intelligent automation, and the ability to connect insights across the claims lifecycle. Verisk helps insurers achieve this through an integrated suite of solutions:

Liability Navigator^® brings advanced analytics and consistent evaluation models directly into adjuster workflows, helping carriers assess exposure, benchmark settlements, and negotiate with confidence.
Discovery Navigator™ uses responsibly built AI to automate medical record review, summarize complex documentation, and accelerate claim resolution while improving accuracy and compliance.
ClaimSearch^®provides industry-leading fraud detection and cross-carrier intelligence, empowering insurers to identify suspicious activity earlier and protect against loss leakage.

Together, these solutions help insurers streamline workflows, enhance claim quality and achieve data-driven consistency from first notice of loss through settlement.

See how Verisk empowers insurers to reduce risk, improve outcomes, and enhance operational excellence across every stage of the claims lifecycle.

Learn more

[1] Occupational Outlook Handbook. U.S. Bureau of Labor Statistics, https://www.bls.gov/ooh/business-and-financial/claims-adjusters-appraisers-examiners-and-investigators.htm (August 28, 2025).

[2] The Great Resignation: A Seismic Shift in the US Labor Market. Bold Business Insights. https://www.boldbusiness.com/featured/the-great-resignation-a-seismic-shift-in-the-us-labor-market/ (January 28, 2025).

[3] Report: Attorney Representation Rates, Liability Litigation Rates Rising. Claims Journal. https://www.claimsjournal.com/news/national/2024/05/31/323948.htm ; Social Inflation: Evidence and Impact on Property-Casualty Insurance. International Insurance Society. https://www.internationalinsurance.org/node/661 ; and Litigation costs drive US Liability claims by 57% over the past decade, reveal Swiss Re Institute. Swiss Re. https://www.swissre.com/press-release/Litigation-costs-drive-US-liability-claims-by-57-over-past-decade-reveals-Swiss-Re-Institute/0b538159-9648-47da-a152-4550a7640d35

[4] Theodorou, J. (2025, September 19). Viewpoint: Fraud in Stage Accidents. Insurance Journal. https://www.insurancejournal.com/news/national/2025/09/19/839747.htm ; Staged Vehicle Accidents One of Top Fraud Trends in South Carolina. National Insurance Crime Bureau. https://www.nicb.org/news/news-releases/staged-vehicle-accidents-one-top-fraud-trends-south-carolina ; and Insurance Fraud Statistics. Wifi Talents Reports. https://wifitalents.com/insurance-fraud-statistics/

[5] Gopinath, B.,Elbers, N, Jagnoor, J, Harris, I, Nicholas, M, Casey, P, Blyth, F, Maher, C, Ian D Cameron, I, (2016, May 20), National Library of Medicine. Predictors of time to claim closure following a non-catastrophic injury sustained in a motor vehicle crash: a prospective cohort study. https://pmc.ncbi.nlm.nih.gov/articles/PMC4875669/; Sparks, G, Lunna, L, Montero, A, Presiado, M, and Hamel, L. (2025, Jul. 11). Americans’ Challenges with Health Care Costs. KFF. https://www.kff.org/health-costs/americans-challenges-with-health-care-costs/