Surge in U.S. Federal Insurance Litigation Highlights Emerging Coverage Risks

Recent data from Lex Machina reveals a distinct increase in U.S. federal insurance coverage litigation, diverging from patterns seen during the pandemic and prior decade. Homeowners’ insurance lawsuits, excluding hurricanes, have escalated annually since 2018, with over 3,500 cases in 2024, primarily involving claims linked to climatic events such as rain, flooding, and high winds. Early 2025 data suggests this trend continues upward. Business liability coverage disputes have similarly surged since 2021, with more than 3,000 federal cases filed in 2024, the busiest period since 2010. Legal experts attribute this rise to factors including heightened social costs, insurer assertiveness in coverage denials, and increasing claims tied to emerging risks like cybersecurity, ESG liabilities, and artificial intelligence deployments. Business interruption insurance lawsuits, while initially driven by COVID-19-related closures, now predominantly relate to weather and climate-induced events including flooding, hurricanes, hail, and wildfires. Over 650 cases were recorded in 2024, more than 50% higher than any pre-pandemic year in the last decade, with 2025 data indicating ongoing growth. This evolving litigation landscape underscores a complex interplay of social, environmental, and technological influences reshaping insurance claims across homeowners, commercial liability, and business interruption sectors. Stakeholders including insurers, legal professionals, and risk analysts must closely monitor these shifts to anticipate emerging legal challenges and manage exposure in a dynamically changing environment. Lex Machina’s analytics platform supports data-driven insights for civil litigation, enabling informed strategies for claim valuation and risk assessment. The persistence and diversification of insurance disputes highlight the importance of adaptive legal and underwriting approaches amid increasing coverage complexity and regulatory scrutiny.