Most people would think that extreme natural disasters are the main reason for the costs of insurance claims. Although the frequency of storms is similar to the past, it is their immensity that is the difference. Surprisingly though, the most expensive claims are caused by other areas: pollution, emissions and product failure.

Two industrial sectors that have seen increased concerns are mining and construction. With more development in emerging markets, the complexity of investment increases while the reliability of outcomes in foreign courts is unstable. The 2015 iron ore dam collapse in Brazil resulted in a $48 billion compensation claim. The largest claim to date was decided against BP for the 2010 oil spill in the Gulf of Mexico for a total of $61.6 billion.

In 2016, the Environmental Protection Agency found deceptive software in Volkswagon diesel engines that affected results for emissions when the car was being tested. The “diesel dupe” scandal resulted in a $15 billion settlement and $1 billion buyback deal for the 475,000 affected cars.

Product liability has resulted in substantial claims for automobiles and faulty airbags. In the pharmaceutical area, lawsuits for talcum powder (which may cause cancer) and a source of asbestos has been suffered lately to the tune of almost $200 billion. Note that China is responsible for 62% of the product recall.

The size of the liability claims has increased partly due to more stringent regulations. In the mining industry, as a follow up to a disaster, the regulators in countries suggest more restrictions for environmental issues and workers’ claims. The same is valid for product recalls and safety concerns in the factories. Countries are following the lead of United States litigation practices as their understanding of appropriate compensation grows.