When a catastrophe event hits, claim volume jumps well past normal weekly intake within days. Somewhere inside that surge are the claims already heading toward litigation, and the window to catch them is short.
Attorney involvement often starts before an adjuster even opens the file. By the time a claim reaches a senior handler, a claimant's representation can already be directing next steps. During a CAT surge, that same claim can sit in a general queue for days before anyone notices.
This article covers what a claim's first hours reveal about litigation risk, a framework for spotting those signals during a CAT surge, and what to do once a claim is flagged.
Why the First Days of a CAT Claim Decide Whether It Ends in Litigation
Data on liability claims points to attorney involvement in a claim's earliest days as one of the strongest available signals of eventual severity and litigation risk.
Among general liability claims that eventually become litigated, 71 percent have attorney representation in place within 24 hours of notice, and 83 percent within 14 days, according to Sedgwick's State of the Line data. Across all general liability bodily injury claims in 2025, the same pattern held at a smaller scale: 56 percent had representation within 24 hours, and 70 percent within 14 days.
The cost gap that follows is steep. New litigated general liability bodily injury claims average 14.4 times higher incurred cost than non-litigated claims.
Closed litigated claims make up only 2.9 to 3.6 percent of total claim closures. They still account for roughly half or more of all paid dollars.
By the time an internal report is filed and reviewed, plaintiff counsel can already be coordinating treatment and building a case strategy. That timeline leaves little room for investigation or claim direction once it passes.
During a routine week, an adjuster has time to notice these signals one claim at a time. During a CAT surge, the same review has to happen across hundreds or thousands of files at once.
What Signals Show a Claim Is Heading Toward Litigation
Litigation risk shows up in patterns, not a single flag. The categories below draw on how attorney involvement, documentation gaps, and claim history behave in the data covered above.
Signal Category | Day-1 Indicator | Suggested Action |
|---|---|---|
Legal representation | Attorney listed as the reporting party, or retained the same day as the loss | Route to a senior adjuster or legal-aware handler immediately |
Claim severity | Initial damage estimate or injury severity high relative to the peril type | Flag for expedited investigation and reserve review |
Documentation gaps | Missing or inconsistent initial statements, or delayed reporting paired with high severity | Escalate for early documentation and evidence preservation |
Historical pattern | Same provider, attorney, or claim pattern seen across prior claims | Route to specialized review |
Jurisdiction/venue | Claim originates in a jurisdiction with known plaintiff-attorney activity | Weight the litigation-risk assessment upward |
How a CAT Surge Makes These Signals Harder to Catch
Sedgwick's 2026 Catastrophe Season Playbook found that total modeled risk from non-hurricane perils rose 12 percent in 2025 compared with 2024. Non-hurricane perils, including severe convective storms, wildfires, and inland flooding, accounted for 99 percent of insured loss in 2025, up nearly 50 percent from 2024.
These events increasingly hit outside traditional peak season and outside historically high-risk regions. A claims team can be fully staffed for hurricane season and still get caught without a surge plan when a spring hailstorm or an inland flood drives the same volume spike.
That timing problem compounds the litigation-risk problem. The days when a signal needs fast routing are the same days a claims team has the least capacity to give any single file individual attention.
Claims Triage vs. Litigation Risk Scoring: What's the Difference
Claims triage sorts incoming claims by severity, complexity, and urgency so the right handler gets the right file. It answers how much attention a claim needs, and how soon.
Litigation risk scoring is a narrower judgment inside that sort. It answers a different question: is this specific claim heading toward a dispute rather than a straightforward settlement.
The two don't always move together. A claim can triage as high severity without carrying high litigation risk. A lower-severity claim can carry outsized litigation risk if legal representation is already involved on day one.
What to Do in the First 24 to 48 Hours
Identify litigation-risk signals at first notice of loss, not after initial processing is already underway.
Escalate any claim with attorney involvement within hours, not days, to a senior handler or legal-aware process.
Preserve documentation early, including photos, statements, and any available incident data, since gaps here are harder to close once a dispute starts.
Check for repeated patterns, including the same attorney, provider, or claim pattern appearing across prior files.
How InsOps Helps
InsOps builds an insurance-trained AI that assists with surfacing litigation-risk claims. LiLa, our insurance-trained LLM, runs inside your own environment, so PII and PHI never leave controlled infrastructure.
LiLa reduces litigation risk by analyzing case patterns and claim history to surface high-risk claims. A person reviews and validates every flagged claim before it moves to a different handling path.
Our Integration Gateway connects to Guidewire ClaimCenter, so claim and case history data flows directly into your existing workflow without custom engineering.
If you are evaluating how to route litigation-risk claims within hours of first notice, especially during a CAT surge, without adding headcount, contact us to talk through what this could look like for your operation.
Frequently Asked Questions
What is FNOL?
First notice of loss, or FNOL, is the point when an insurer first learns about a claim. It's also the earliest point at which litigation-risk signals, like attorney involvement, can be caught.
What percentage of insurance claims go to litigation?
There isn't one reliable, dated national figure for this, since it varies by line of business, peril type, and jurisdiction. What is well documented is that litigated claims are disproportionately costly once they occur, which is why identifying litigation risk early matters more than knowing an overall average rate.
Why do some insurance claims end up in litigation?
Claims move into litigation most often when there's a dispute over how much a covered loss is worth, or a disagreement about what the policy actually covers. Early attorney involvement is one of the clearest signals that this kind of dispute is already forming.
Does attorney involvement early in a claim increase litigation risk?
Yes. As covered above, attorney involvement often happens within a claim's first day or two, well before many organizations complete internal reporting, and it's one of the clearest available predictors of litigation and severity.
What is a litigation risk score in insurance claims?
A litigation risk score is a signal, built from claim history, documentation, and case patterns, that estimates how likely a claim is to move toward a dispute rather than a straightforward settlement.
How does claims triage reduce litigation costs?
Triage doesn't reduce litigation costs directly. It reduces the odds that a litigation-risk claim gets missed inside a large incoming queue, especially during a CAT surge, by routing it to a handler equipped to intervene before positions harden.
How should insurers triage claims during a CAT event surge?
The same signal categories used in routine claims still apply during a CAT surge, but they need to be checked faster and across a much larger volume. Structuring intake so litigation-risk signals get flagged at first notice, rather than waiting for manual review days later, keeps the surge itself from becoming the reason a high-risk claim gets missed.