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When the Pendulum Swings: Insights from the 2025 Insurance Litigation Report

October 21, 2025 (3 min read)

Experts in American insurance law recently gathered to discuss key findings from the Lex Machina® 2025 Insurance Litigation Report. Ron Porter, Esq. of Lex Machina met with Daniel Cotter, Esq., member of Aronberg Goldgehn Davis & Garmisa, and Karen Yotis, Esq., Content Manager & Editor for insurance law from LexisNexis® Practical Guidance. Together, they discussed how data is revealing a new landscape for coverage litigation in the United States.

Watch the full recording after registering, and visit the report page to request your copy of the Lex Machina 2025 Insurance Litigation Report.

In his more than 30 years of insurance law practice, Cotter has observed what he calls a “pendulum effect” in claims strategy, in which carriers shift from a posture of aggressively contesting many claims to a more conciliatory approach driven by concerns about market perception. In recent years, inflation and climate-related pressures have aligned to swing that pendulum toward a more hawkish posture, marked by stricter coverage decisions and closer scrutiny of actuarial practices.

“Business liability [coverage] cases . . . have steadily increased since the pandemic,” said Ron Porter. He noted that data from Lex Machina “shows that this type of insurance litigation continues to increase in 2025.” In 2024, over 3,000 business liability coverage lawsuits were launched in federal district courts, more than in any year since 2010.

Panelists attributed this growth to multiple factors, including rising social costs and new technologies creating unprecedented risk scenarios. “Insurers are taking more assertive stances on denials,” said Cotter.

Karen Yotis added that insurers are also grappling with “emerging fact patterns that have little precedent,” such as cybersecurity risks, ESG-related liabilities, and insureds’ use of artificial intelligence. “These breed litigation,” she said. “There’s not a whole lot of precedent on those fact patterns and it seems to be causing more filings.”

Persistence of Business Interruption Claims

Although business interruption coverage drew the spotlight for insurance litigation starting in 2020, filings declined from 2023 to 2024 as the limitations period ended for most claims stemming from early pandemic closures. That decline, however, masks the continuing relevance of business interruption disputes. In 2024, more than 650 such cases were filed, a figure over 50% higher than any year before 2020.

“The focus has shifted from Covid-19 business interruption disputes to a climate-driven business interruption insurance situation, which comes from the hail, and the storms, and the floods of recent years,” said Yotis.

“Post-pandemic, [business interruption litigation] really focuses on climate events,” agreed Cotter. For example, “there are a lot of cases in California where the wildfires have caused significant business interruption,” he said.

Ron Porter added, “Perhaps the Covid coverage disputes with business interruption [issues] have just raised awareness of this type of coverage generally among insureds.”

Analytics for Successful Coverage Litigation

“The use of AI and new technologies, I think, has given people on both sides of the beat more insights into liability and more novel arguments,” said Daniel Cotter.

With our Litigation Report series, Lex Machina remains the only Legal Analytics® platform offering regularly published editorial analyses of emerging data trends. Drawing on exclusive insights from the lawyers and data scientists behind the platform, these reports equip legal and insurance professionals with actionable intelligence for effective risk assessment and claim resolution in the 2020s.

According to an April 2025 survey, more than 95% of law firm attorneys and professional staff agreed that analytics add significant value to their practice, and seven in ten said their clients expect them to use litigation analytics in their work.

Ready to see the difference that data can make for your office? Request a brief demonstration of Lex Machina and a customized analytical report today.

FAQs: 2025 Insurance Litigation and Analytics

  1. What are the major trends in insurance litigation for 2025?

    The 2025 Lex Machina Insurance Litigation Report highlights increases in business liability coverage disputes, climate-related claims, and litigation involving emerging risks such as AI and ESG liabilities.

  2. Why are insurers taking more assertive stances in 2025?

    Economic inflation, increased claims frequency, and social cost pressures have led insurers to adopt stricter coverage scrutiny and more frequent denials — what at least one expert calls the “pendulum swing” back to a defensive posture.

  3. How has business interruption litigation evolved since the pandemic?

    While COVID-related cases have declined, new climate-driven business interruption disputes are surging due to wildfires, floods, and severe storms. These cases now represent a significant share of federal insurance filings.

  4. How does Lex Machina help insurance litigators and carriers?

    Lex Machina’s Legal Analytics® platform delivers real-time insights into case trends, judicial behavior, and outcomes—empowering firms and insurers to refine risk assessment, improve litigation strategy, and demonstrate data-backed value to clients.