12 billion for Errors and Omissions (E&O) and USD 5.4 billion for Directors and Officers (D&O). US businesses spent another USD 13 billion on the liability portion of commercial multi-peril policies, USD 9.5 billion for medical malpractice and USD 3 billion for product liability covers. The UK is the world’s second largest market for liability insurance, with USD 9.9 billion of liability premiums in 2013. The largest sub-line of business is public and product liability. This is followed by professional indemnity and employers’ liability (cover for employment-related accidents and illnesses). There has been a significant shift in the sub-segments of UK liability insurance. In the last decade, the share of professional indemnity has increased from about 14% to 32%, highlighting the shift towards a more services-driven economy. Manufacturing, meanwhile, comprises a lower share of liability claims as accidents related to injuries and property damages have declined. In continental Europe, the largest liability insurance markets are Germany, France, Italy and Spain. Together they made up almost USD 22 billion of global liability premiums in 2013. Typically governed by civil law systems, these markets rely on local conditions and historical experience to determine which liability policies and covers are available. Penetration ranges from 0.16% to 0.25%, which is low compared to the common law countries such as the US, the UK and Australia. Japan and Australia are the largest markets in the Asia Pacific region, with commercial liability premiums of USD 6.0 billion and USD 4.8 billion, respectively, in 2013. At 0.12% of GDP, the penetration of liability insurance in Japan is much lower than in other advanced economies. In Australia, penetration is much higher at 0.32% of GDP. This is due to the country’s English law derived legal framework, which has increased demand for employers’ liability insurance. Australia has mandatory covers for aviation, maritime oil pollution and residential construction and, in certain states, for medical practitioners, property brokers and stock brokers. Liability insurance premiums have grown at an average annual rate of 11% since 2000. China is the ninth largest commercial liability market globally, with premiums of USD 3.5 billion in 2013 and strong annual average growth of 22% since 2000. However, penetration remains low at 0.04% of GDP. Growth has been driven by increasing risk awareness and regulatory changes. Insurer duties Liability insurers have one, two or three major duties, depending upon the jurisdiction: the duty to defend, the duty