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⚖️ '''Climate litigation''' refers to legal proceedings in which plaintiffs seek to hold corporations, governments, or other entities accountable for contributing to or failing to address climate change — and within the insurance industry, it represents a rapidly emerging [[Definition:Liability insurance | liability]] exposure with significant implications for [[Definition:Underwriting | underwriting]], [[Definition:Claims management | claims management]], and [[Definition:Loss reserve | reserving]]. Cases may allege failure to reduce greenhouse gas emissions, inadequate climate-risk disclosure, or breach of fiduciary duties related to climate governance, and they increasingly name parties covered under [[Definition:Directors and officers liability insurance (D&O) | D&O]], [[Definition:General liability insurance | general liability]], and [[Definition:Professional liability insurance | professional liability]] policies.

📂 The mechanism through which climate litigation affects insurers is multifaceted. [[Definition:Defense costs | Defense costs]] can be substantial even when cases are ultimately dismissed, and the expanding legal theories — including public nuisance, consumer protection, and human rights claims — make it difficult for [[Definition:Actuarial science | actuaries]] to estimate future exposure based on historical patterns. Insurers must evaluate whether existing policy wordings intended for traditional torts adequately respond to these novel claims or whether [[Definition:Pollution exclusion | pollution exclusions]] and other limitations apply. Some carriers have begun developing specific [[Definition:Exclusion | exclusions]] or sublimits for climate-related claims, while others view the uncertainty as an underwriting opportunity requiring careful [[Definition:Pricing | pricing]] rather than blanket restriction.

🌐 The pace of climate litigation is accelerating globally, with significant case volumes in the United States, Europe, and Australia, and growing activity in developing jurisdictions. For [[Definition:Reinsurance | reinsurers]], the potential for [[Definition:Clash risk | clash risk]] is pronounced — a landmark ruling in one jurisdiction could trigger claims across thousands of policies simultaneously. [[Definition:Rating agency | Rating agencies]] and regulators have begun flagging climate litigation as a material emerging risk, expecting insurers to articulate how their [[Definition:Enterprise risk management (ERM) | enterprise risk management]] frameworks account for this exposure. As the legal landscape evolves, the insurance industry's ability to quantify and price climate litigation risk will be tested in ways reminiscent of earlier systemic liability challenges like [[Definition:Asbestos liability | asbestos]] and [[Definition:Mass tort | mass torts]].

'''Related concepts'''
{{Div col|colwidth=20em}}
* [[Definition:Climate change]]
* [[Definition:Directors and officers liability insurance (D&O)]]
* [[Definition:Social inflation]]
* [[Definition:Emerging risk]]
* [[Definition:Mass tort]]
* [[Definition:Liability insurance]]
{{Div col end}}

Definition:Climate litigation - Revision history

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