
Soaring claims costs, artificial intelligence (AI)-related risks, and geopolitical uncertainty are among the top issues trucking fleets will face in 2025, according to Gallagher’s latest commercial insurance trends analysis.
The rising cost of insurance claims due to increased litigation, high jury awards, and expanded liability definitions is reaching new heights. This trend, referred to as social inflation, is the first on the list of trends that Gallagher retail brokerage experts are watching in Q1 2025.
The company says that the number of “nuclear” (exceeding $10 million) and “thermonuclear” (exceeding $100 million) verdicts are setting records, fueled by the growing societal opinion that businesses can afford the cost of damages, adding that the rise of litigation funding means more third parties are financing plaintiff’s legal costs in exchange for a portion of any financial recovery from the lawsuit.

“Social inflation is affecting commercial auto liability through larger jury awards, increased litigation, and more aggressive legal strategies. Changes in laws favoring plaintiffs and rising public expectations for higher damages from commercial companies are contributing to the growing cost of claims,” the analysis reads.
To manage increasing insurance costs and reduce risk exposure, Gallagher recommends fleets evaluate current safety programs and employee training and ensure they have adequate coverage limits to protect against large jury awards and increased litigation costs. Carriers can also collaborate with third-party administrators (TPAs) and claims providers on defence strategies that can help mitigate potential legal costs.
AI adoption
While AI has the potential to boost efficiency, the adoption of any new technology brings unforeseen risks, Gallagher says, adding that it’s ‘imperative’ that organizations deploy a strategy for striking the delicate balance between making sound, risk-based decisions while staying technologically competitive to enhance productivity.
And while insurers have been slow to address AI risks, claims related to AI exposures keep growing, and coverage policies are expected to evolve, too, with fleets expected to address risks through affirmative coverage or exclusionary language.
“A good starting point is to develop an AI risk assessment and embed an AI risk management framework into the overall enterprise risk management program,” the analysis reads. “As AI weaves its way into every facet of business, it demands an enterprise-wide strategy to navigate the questions and uncertainties it brings to every line of coverage.”
Supply chain disruptions
According to a 2024 Gallagher study, business owners are concerned about ongoing supply chain disruptions. This trend is also expected to persist into 2025, with disruptions stemming from product recalls, severe weather or wildfires, cyber-attacks, and shutdowns of critical transport routes. Inflation has further driven up manufacturing and transportation costs, while cargo theft remains a growing concern, particularly for high-demand goods such as food, beverages, and electronics.
In response to such risks, insurers may impose stricter terms and higher premiums, Gallagher warns. The company further advises fleets to consider solutions like business interruption insurance, contingent business interruption coverage and supply chain insurance. Meanwhile, exploring emerging technology and tools like GPS and predictive analytics may help companies anticipate and address potential issues.

Catastrophe losses
The commercial insurance market is also adjusting to a changing risk landscape as catastrophe (CAT) losses increasingly stem from secondary perils such as convective storms, hail, flooding, and wildfires in the U.S. While hurricanes have traditionally driven most CAT claims, recent events like the 2024 California wildfires highlight a shift in underwriting priorities, Gallagher said.
“Despite the event’s magnitude, it’s expected to be manageable for commercial entities from an insurer and reinsurer standpoint. Nonetheless, it’s likely to make securing wildfire coverage at reasonable rates more challenging soon, as carriers will continue to focus on high-prone wildfire states and portfolios and will be careful in deploying capacity — especially on portfolios with large aggregation of values in these high-risk areas.”
Because the cost of claims is increasing due to rising labor and material costs to repair and rebuild more frequently, carriers are reevaluating their appetite for risk, Gallagher said, adding that businesses are encouraged to update property valuations regularly, explore two-year rate locks to ensure stability and consider parametric insurance or alternative risk financing solutions such as captives.
Geopolitical risks add uncertainty
With more than 70 countries holding elections in 2024, geopolitical tensions added pressure not only in North America. Rising political tensions, regulatory shifts, and global conflicts are increasing risk exposure, and geopolitical instability can also disrupt supply chains, cause sudden regulatory changes, and create market volatility, affecting businesses’ financial stability and insurance needs.
This may lead insurers to impose stricter terms and higher reinsurance costs, which are passed on to business owners. To mitigate impacts, Gallagher suggests fleets should assess potential regulatory shifts in their operating regions—especially those operating internationally—and work with brokers to explore risk transfer solutions.
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