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Joint Statement

Caps on Lawsuit Damages Threatens Jobs, Raises Costs for Residents 

Mar 27, 2024

ANNAPOLIS, Md. — The Maryland Chamber of Commerce and the American Property Casualty Insurance Association (APCIA) voice strong opposition to Senate Bill 538, legislation that aims to drastically increase the cap on noneconomic damages in personal injury and wrongful death lawsuits in Maryland.

The current $935,000 cap, which already ranks among the highest in the nation and automatically increases each year for inflation, has provided a reasonable path to compensation for 35 years while limiting unpredictable awards that could devastate local employers. SB 538 seeks a 90 percent increase, hiking the cap to $1.75 million while also raising the annual escalator adjustment from $15,000 to $20,000.

The long-term impacts of this damaging legislation could include:

  • Inevitable cost hikes for Maryland’s residents and business community.
  • Higher liability risks would result in spikes in insurance rates, forcing companies to raise prices, cut costs like employee wages and benefits, or potentially move out of state altogether.
  • Larger payouts in lawsuits, which increases the risk for insurance companies, would result in a riskier insurance pool and will lead insurance companies to raise premiums, passing the additional costs onto Maryland policyholders.

Mary D. Kane, President & CEO of the Maryland Chamber of Commerce, warns that the proposed changes would raise costs for Maryland residents and threaten jobs. "Nearly doubling the cap on noneconomic damages would inevitably lead to higher insurance rates and increased costs that would be passed onto Maryland residents and businesses," said Kane. "This shortsighted legislation puts our state at a competitive disadvantage and hinders our ability to attract and retain job creators.”

“If enacted, SB 538 could increase insurance costs for consumers and businesses and lead to a significant increase in claims and lawsuit filings,” said Nancy Egan, vice president of state government relations and counsel for the American Property Casualty Insurance Association. “APCIA share’s the concerns of Maryland’s business about the potential impacts of Senate Bill 538 and are urging the legislature to vote no on this harmful bill.”

On behalf of our state’s business community, the Maryland Chamber of Commerce and APCIA urges elected leaders to reject SB 538, demonstrating their commitment to fostering a business-friendly environment and safeguarding the financial stability of all Marylanders.

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About the Maryland Chamber of Commerce

The Maryland Chamber of Commerce is the only statewide business advocacy organization and the leading voice for business in the state. Together with their 6,800+ members, they form a statewide coalition that is committed to ensuring that Maryland is attracting and retaining quality jobs, developing vibrant, sustainable communities and staying at the forefront of global competitiveness and economic prosperity.

About the American Property Casualty Insurance Association

The American Property Casualty Insurance Association (APCIA) is the primary national trade association for home, auto, and business insurers. APCIA promotes and protects the viability of private competition for the benefit of consumers and insurers, with a legacy dating back 150 years. APCIA members represent all sizes, structures, and regions — protecting families, communities, and businesses in the U.S. and across the globe.

A headshot of Maryland Chamber of Commerce President & CEO Mary Kane

Mary D. Kane
President & CEO
Maryland Chamber of Commerce