The tax effects of significant items comprising Berkshire’s net deferred tax liabilities as of June 30, 2002 and December 31, 2001 are as follows (in millions).

The following table summarizes Berkshire's common stock activity during the first half of 2002.

On May 28, 2002, Berkshire sold 40,000 SQUARZ for net proceeds of $398 million. Each SQUARZ security consists of a $10,000 par amount senior note due in November 2007 together with a warrant, which expires in May 2007, to purchase 0.1116 shares of Class A common stock or 3.3480 shares of Class B common stock for $10,000. A warrant premium is payable to Berkshire at an annual rate of 3.75% and interest is payable to note holders at a rate of 3.00% per annum, producing a net negative spread to Berkshire of 0.75%.

Assets and liabilities of Berkshire’s finance and financial products businesses are summarized below (in millions).

A disaggregation of Berkshire’s consolidated data for the second quarter and first half of each of the two most recent years is as follows. Amounts are in millions.

Net earnings for the second quarter and first half of 2002 and 2001 are disaggregated in the table that follows. Amounts are after deducting minority interests and income taxes. Dollar amounts are in millions.

A summary follows of underwriting results from Berkshire’s insurance businesses for the second quarter and first half of 2002 and 2001. Dollar amounts are in millions.

Premiums earned in the second quarter of 2002 were $1,640 million, an increase of 9.0% from $1,504 million in 2001. For the first half of 2002, premiums earned were $3,202 million, an increase of 8.0% from $2,966 million in 2001. The growth in premiums earned for voluntary auto was 7.5% and reflects increased rates and a 4.3% increase in policies-in-force during the past year.

Policies-in-force over the last twelve months increased 4.2% in the preferred risk auto market and 4.6% in the standard and nonstandard auto lines. Voluntary auto new business sales in the first half of 2002 increased 21.7% compared to 2001. The sales closure ratio and the policy retention rate both improved during the first six months of 2002, which management believes was aided by recent premium rate increases taken by competitors. Voluntary auto policies-in-force increased by 200,467 during the first half of 2002 with growth in both the standard and nonstandard lines.

Losses and loss adjustment expenses incurred increased 5.5% to $1,306 million in the second quarter of 2002. For the first half of 2002 losses and loss expenses incurred were relatively unchanged from 2001. The loss ratio for property and casualty insurance, which measures the portion of premiums earned that is paid or reserved for losses and related claims handling expenses, was 77.5% for the first six months of 2002 compared to 83.4% in 2001. The improvement reflects the effect of premium rate increases taken in 2000 and 2001 and relatively unchanged losses. Claim frequency decreased in 2002 for most coverages, reflecting mild winter weather during the first quarter. Claim severity continued to increase in 2002, but at a slower rate than in 2001. Losses incurred from catastrophe events for the first half of 2002 totaled approximately $13 million versus $40 million during the comparable 2001 period.

GEICO is a defendant in several class action lawsuits related to the use of collision repair parts not produced by the original auto manufacturers, the calculation of "total loss" value and whether to pay diminished value as part of the settlement of certain claims. Management intends to vigorously defend the corporation's position on these claim settlement procedures. However, these lawsuits are in various stages of development and the ultimate outcome cannot be reasonably determined at this time.

Underwriting expenses for the second quarter of 2002 increased $7 million (2.9%) from the second quarter of 2001. For the first six months of 2002, underwriting expenses increased $37 million (7.5%) from the expenses for the comparable period in 2001. The increase in underwriting expense was principally due to higher profit sharing accruals, partially offset by a decline in advertising expense.

General Re conducts a global reinsurance business, which provides reinsurance coverage in the United States and 135 other countries around the world. General Re’s principal reinsurance operations are: (1) North American property/casualty, (2) international property/casualty, which is comprised of direct reinsurance business and broker-market business, and (3) global life/health. The direct international property/casualty and global life/health reinsurance operations are conducted primarily through Germany-based Cologne Re. Broker-market business is conducted through the U.K.-based Faraday operations. At June 30, 2002, General Re held an 89% economic ownership interest in Cologne Re.

General Re’s consolidated underwriting results for the second quarter and first half of 2002 improved over comparable 2001 periods. Results continued to improve in the North American property/casualty, international property/casualty direct reinsurance, broker-market and global life/health reinsurance businesses. Although the improvement in first half results is encouraging, General Re’s management believes that additional premium rate increases and more favorable coverage terms are needed in certain lines to achieve targeted long-term underwriting profitability. General Re’s estimate of net losses of $1.9 billion arising from the September 11th terrorist attack was relatively unchanged during the first half of 2002. Information with respect to each of General Re’s underwriting units is presented below.

General Re’s North American property/casualty pre-tax underwriting results for the second quarter and first half of 2002 and 2001 are shown below. Dollar amounts are in millions.

North American property/casualty operations underwrite predominantly excess reinsurance and insurance across multiple lines of business. Reinsurance contracts are written on both a treaty (groups of risks) and facultative (individual risk) basis. Second quarter and first half 2002 North American property/casualty earned premiums decreased $131 million (12.0%) and $61 million (3.1%), respectively, from the comparable 2001 periods. Premiums earned in 2001 included approximately $275 million from a retroactive reinsurance contract assumed in the second quarter. There were no similar large contracts affecting earned premiums in 2002. Otherwise, earned premiums increased $144 million (17.6%) and $214 million (12.4%) during the second quarter and first half of 2002, respectively. The growth in earned premiums was primarily due to rate increases partially offset by non-renewal of unprofitable business.

Underwriting results for the second quarter and first half of 2002 in the North American property/casualty operations, while improved over the comparable 2001 periods, included increases to unpaid loss and loss adjustment expense estimates on prior years’ loss events. For the first half of 2002 and primarily in the second quarter, prior-year liabilities increased by $188 million. The adjustment to losses arose primarily in casualty business written from 1997 through 2000. Reserve increases for prior years’ claims during the first half of 2001 increased net underwriting losses by approximately $134 million. Every quarter General Re utilizes new information available to reevaluate and adjust, if necessary, previously established loss reserves. However, the estimation of ultimate losses with respect to claims which may take years to settle is prone to a high degree of estimation error. In addition, underwriting losses for the first half of 2002 included approximately $48 million of accretion on discounted workers’ compensation reserves and amortization of deferred charges on retroactive reinsurance contracts written in prior years. For the first six months of 2001, such charges were approximately $37 million.

Partially offsetting underwriting losses related to prior years were improved current accident year results, which produced $82 million of underwriting gains in the first half of 2002. The combined effects of (1) an unusually low level of property losses, and (2) the favorable effects of repricing and improved policy terms and conditions implemented over the past two years allowed current accident year underwriting results to return to an underwriting profit. However, a very high degree of estimation is involved in establishing loss reserves for 2002 occurences given the long-tail nature of the casualty business. For the first half of 2002, no large losses arising from catastrophes and other large individual property losses ($20 million or greater) affected underwriting results, a condition that was unusually favorable, and therefore results were better than anticipated. For the second quarter and first half of 2001, large losses totaled $96 million, arising from catastrophes (Tropical Storm Allison) and other large individual property losses. Property business is expected to continue to produce volatile results from period to period, depending on the timing and magnitude of major loss events.

General Re’s international property/casualty pre-tax underwriting results for the second quarter and first half of 2002 and 2001 are shown below. Dollar amounts are in millions.

General Re’s global life/health affiliates reinsure such risks worldwide. Earned premiums worldwide for these operations increased $13 million (2.7%) in the second quarter and decreased $47 million (4.8%) year-to-date from the comparable 2001 periods. For the second quarter and first half of 2002, earned premiums in the U.S. life/health business increased $23 million (7.8%) and $5 million (0.8%), respectively, over the same periods in 2001. Growth in U.S. second quarter 2002 premiums arose principally from additional premiums arising from operations in run-off. International life/health earned premiums decreased $10 million (5.1%) during the second quarter and $52 million (13.0%) in the first half of 2002 when compared to the same periods in 2001. Adjusting for the effect of foreign exchange, earned premiums decreased 7.7% and 12.2% for the second quarter and first half of 2002. The decrease was primarily due to a 2002 change in reporting for modified coinsurance business. This change had a minimal impact on net underwriting results but reduced premiums earned and losses and expenses by corresponding amounts.

For the second quarter and first half of 2002, the U.S. life/health operations produced an underwriting loss of $5 million and $16 million, respectively, compared with a loss of $1 million and $25 million in the same periods of 2001. The improvement in first half results was primarily due to lower losses in the individual health operations and decreased mortality in the life business. Partially offsetting this improvement were increases in reserves for run-off business and underwriting losses in the group health business.

International life/health results for the second quarter and first half of 2002 produced underwriting gains of $12 million. Results for 2001 consisted of an underwriting gain of $6 million in the second quarter and a first half underwriting loss of $3 million. The improvement in the international life/health business was primarily due to favorable settlements in life business in Asia. International health results for the first half of 2002 were relatively unchanged compared to the same 2001 period.

The Berkshire Hathaway Reinsurance Group ("BHRG") underwrites principally excess-of-loss reinsurance coverages for insurers and reinsurers around the world. BHRG is believed to be one of the leaders in providing catastrophe excess-of-loss reinsurance. Since July 2001, BHRG has also written a number of policies for large or otherwise unusual individual commercial risks (including aircraft, terrorism and multi-peril), referred to as special risk business. BHRG also generates significant premium volume from a few very sizable retroactive reinsurance contracts.

In the aggregate, BHRG generated earned premiums for the second quarter of $530 million in 2002 and $1,671 million in 2001. For the first half, premiums earned were $1,285 million in 2002 and $1,831 million in 2001. In 2002, BHRG produced a net underwriting gain of $47 million for the second quarter and $39 million for the first half. In 2001, underwriting losses totaled $60 million for the second quarter and $138 million for the first half.

Premiums earned under catastrophe reinsurance and special risk insurance for the second quarter totaled $260 million in 2002 and $71 million in 2001. For the first half premiums earned from these businesses were $482 million in 2002 and $130 million in 2001. The volume of business written in 2002 has increased substantially over the prior year, particularly in the special risk markets, reflecting an increase in opportunities to write these coverages at rates considered adequate by BHRG management.

The catastrophe reinsurance and special risk operations generated second quarter net underwriting gains of $198 million in 2002 and $70 million in 2001. For the first half, net underwriting gains were $355 million in 2002 and $121 million in 2001. The underwriting results in each period reflect relatively minor amounts of catastrophe losses and other large individual property losses. However, substantial risk of loss remains for the catastrophe and special risk businesses as of June 30, 2002. A substantial portion of this risk is in property lines. Consequently, the timing and magnitude of catastrophe or other large individual property losses may produce extremely volatile periodic underwriting results over the next twelve months. For instance, had a truly significant loss event occurred during the first half of 2002 under one of several particularly large policies, the underwriting gains previously discussed would have been eliminated.

Premiums earned from retroactive reinsurance policies for the first half were $399 million in 2002 and $1,566 million in 2001. In 2002, substantially all of the amounts earned were in the first quarter whereas in 2001 substantially all premiums were from two policies written in the second quarter. Underwriting losses attributed to retroactive reinsurance policies for the second quarter totaled $112 million in 2002 and $104 million in 2001. For the first half, retroactive policies produced underwriting losses of $232 million in 2002 and $202 million in 2001. The underwriting losses result from the amortization of deferred charges that are established at the inception of retroactive reinsurance contracts. The deferred charges, which represent the difference between the policy premium and the ultimate estimated claim reserves, are subsequently amortized over the estimated claim payment period using the interest method.

The amortization charges are recorded as losses incurred and therefore, produce underwriting losses. The increase in amortization charges in 2002 over 2001 periods relates to the significant amount of new business written in recent years. Unamortized deferred charges at June 30, 2002 totaled approximately $3.2 billion. Deferred charge amortization is expected to produce large underwriting losses over the remainder of 2002 and for the next several years. BHRG believes that these charges will be reasonable relative to the large amounts of float generated from these policies. Income generated from the investment of float is reflected in net investment income.

Other reinsurance activities generated second quarter earned premiums of $270 million in 2002 and $44 million in 2001. For the first six months, premiums earned were $404 million in 2002 and $135 million in 2001. Premiums earned in 2002 periods included amounts earned from several new quota-share contracts with a number of Lloyd’s syndicates and a large quota-share contract with a major U.S. insurer. Other reinsurance activities produced net underwriting losses for the second quarter of $39 million in 2002 and $26 million in 2001. For the first six months, underwriting losses totaled $84 million in 2002 and $57 million in 2001.

Berkshire's other primary insurers consist of several businesses, including the National Indemnity ("NICO") Primary group, U.S. Investment Corporation ("USIC"), the Homestate group, Central States Indemnity and Kansas Banker's Surety. Collectively, premiums earned by this group of $166 million and $317 million in the second quarter and first half of 2002, respectively, exceeded the corresponding prior year amounts by $51 million (44.3%) and $96 million (43.4%), respectively. The increases in premiums were principally attributed to increased volume by the NICO Primary group, USIC and the Homestate group. For the first six months, Berkshire's other primary insurers produced underwriting gains of $6 million in 2002 and $9 million in 2001.

After-tax net investment income produced by Berkshire’s insurance and reinsurance businesses for the second quarter and first half of 2002 and 2001 is summarized in the table below. Dollar amounts are in millions.

Pre-tax net investment income earned by Berkshire's insurance businesses for the second quarter of 2002 was essentially unchanged from the second quarter of 2001. Investment income for the first six months of 2002 increased $36 million (2.6%) over the corresponding period in 2001. The increase in investment income in 2002 reflects an increase in invested assets, partially offset by the effects of lower interest rates. Invested assets held by the insurance businesses totaled $78.0 billion at June 30, 2002.

Invested assets derive from shareholder capital as well as policyholder float. "Float" is an approximation of the net amount of liabilities due to policyholders that are temporarily available for investment. Float represents the sum of unpaid losses and loss adjustment expenses, unearned premiums and other policyholder liabilities less the aggregate of premiums and reinsurance balances receivable, deferred policy acquisition costs, and deferred charges on retroactive reinsurance contracts. Consolidated float at June 30, 2002 was approximately $38.5 billion, compared to $35.5 billion at December 31, 2001 and $30.8 billion at June 30, 2001.

The large increase in float over the past year principally derives from retroactive reinsurance written over the past year by BHRG, and from exceptionally high levels of losses incurred by the reinsurance operations during the second half of 2001. Consequently, the cost of float, as measured by the ratio of net pre-tax underwriting losses to average float was very high for the year ending December 31, 2001 at 12.8%. During the first half of 2002, the cost of float was approximately zero, as Berkshire's consolidated insurance and reinsurance businesses produced a pre-tax underwriting gain of approximately $4 million. Absent a major catastrophe or a significant increase in reserves established for prior years’ loss events, the cost of float is expected to remain very low, if not negative, over the remainder of 2002.

Results of operations of Berkshire's diverse non-insurance businesses for the second quarter and first half of 2002 and 2001 are summarized in the following table. Dollar amounts are in millions.

A comparison of revenues and pre-tax income for the non-insurance business segments follows. Dollar amounts are in millions.

The building products group includes Johns Manville, Benjamin Moore, Acme Building Brands, and MiTek Inc. The comparative increases in revenues and pre-tax income of this group in 2002 versus 2001 are principally due to the inclusion of MiTek Inc., acquired July 31, 2001 and Johns Manville, acquired February 27, 2001. In addition, revenues and pre-tax income of Acme Building Brands increased in the first half of 2002 as compared to 2001 due to increased shipments of block and brick products. Pre-tax income of Benjamin Moore improved in the 2002 periods due to higher sales volume, favorable raw materials prices and lower manufacturing costs. Berkshire’s building products businesses continue to benefit from mild weather conditions and favorable economic conditions in the residential construction markets, including low interest rates.

Pre-tax income results of the finance and financial products businesses in 2002 included significant increases over the prior year periods at BH Finance and from Berkshire's interests in Berkadia LLC. BH Finance primarily invests in fixed income instruments on a substantially leveraged basis under a small number of proprietary investing strategies. Such strategies are subject to market conditions which have been unusually favorable in 2002. This condition is expected to remain throughout the balance of 2002, but at some point profit opportunities from these strategies will diminish. Income derived from Berkadia’s earnings are entirely dependent on its loan to FINOVA, which has a fixed term and declining amount. Thus, the levels of investments and earnings from these activities may decline significantly in the future. Nevertheless, these activities are expected to remain very profitable over the remainder of 2002.

Somewhat offsetting the profits discussed above were operating losses in 2002 from General Re Securities ("GRS"). During the first quarter of 2002, General Re announced that the operations of GRS would be run-off in an orderly manner. GRS generated a pre-tax loss of $20 million for the second quarter and $109 million in the first half of 2002, which includes a charge of $34 million for employee severance and other run-off related costs. During 2002, GRS also incurred trading losses in restructuring certain positions in connection with the run-off, with the objective of reducing the number of trading positions and related risks. Additional losses may be incurred in future periods as additional restructuring transactions take place. GRS produced small operating losses in the comparable 2001 periods.

The comparative increases in flight services revenues reflects growth in NetJets’ (formerly ExecutiveJet) aircraft sales and related management fees. Partially offsetting the revenue increase at NetJets was a slight decline in training revenues at FlightSafety and a larger decline in simulator sales, which comprises a relatively small part of FlightSafety’s business. Second quarter pre-tax earnings improved at FlightSafety due to cost savings initiatives in the government and corporate aviation business markets. NetJets posted a small net operating gain for the second quarter of 2002 and a net loss for the first half. Berkshire's flight services operations have been negatively affected by the September 11th terrorist activity and the slowing U.S. economy.

The comparative increases in retail revenues in 2002 are largely due to increases at the Nebraska Furniture Mart and R.C. Willey. In 2002, comparatively higher earnings at R.C. Willey and Jordan’s were offset by decreased earnings from the jewelry businesses. In addition, results for the second quarter of 2002 include development expenses incurred by the Nebraska Furniture Mart in connection with a new store in the Kansas City area that is expected to open in 2003.

Shaw continues to achieve volume-driven sales growth, most notably in residential carpet and hard surface product lines. Sales of commercial flooring products continue to lag, however, as a result of lower capital spending by commercial customers. Pre-tax income growth in 2002 reflects the increased revenue, coupled with comparatively lower material costs and increased plant-operating levels. In January 2002, Berkshire acquired the remaining shares of Shaw that were previously held by a group of investors that included Robert Shaw, CEO of Shaw, Julian Saul, President of Shaw, and other managers and former directors of Shaw.

Berkshire's other non-insurance businesses consist of the results of several smaller businesses, as well as income from investments in MidAmerican. Income from MidAmerican consists of Berkshire’s share of MidAmerican’s net income plus income earned from investments in the 11% trust preferred securities. For the second quarter and first half of 2002, income from MidAmerican totaled $110 million and $179 million, respectively. In 2001, second quarter and first half earnings attributed to MidAmerican were $38 million and $85 million, respectively. The increase in income from MidAmerican in 2002 was primarily due to one time gains recorded in the second quarter by MidAmerican, the elimination of goodwill amortization effective January 1, 2002 and Berkshire’s additional investments during 2002. See Note 3 to the Interim Consolidated Financial Statements for additional information regarding these investments. Otherwise, the increase in earnings of other businesses in 2002 was primarily attributed to newly-acquired businesses, Albecca Inc. on February 8, 2002 and Fruit of the Loom, effective April 30, 2002.

Purchase-accounting adjustments reflect the after-tax effect on net earnings with respect to the amortization of fair value adjustments to certain assets and liabilities recorded at various business acquisition dates. Prior to 2002, this amount also included the systematic amortization of goodwill.

Effective January 1, 2002, Berkshire ceased amortizing goodwill of previously acquired businesses in accordance with the provisions of SFAS No. 142. See Note 12 for additional information related to this new accounting standard. Purchase-accounting adjustments for the second quarter and first half of 2001 included $142 million and $282 million, respectively, of after-tax goodwill amortization. These amounts do not include Berkshire’s share of goodwill amortization of $20 million and $40 million, respectively, related to its equity method investment in MidAmerican.

Other purchase-accounting adjustments consist primarily of the amortization of the excess of market value over historical cost of fixed maturity investments held by certain businesses at their acquisition dates, primarily at General Re. Berkshire includes such excess in the cost of the investments and subsequently amortizes it over the estimated remaining lives of the investments. The unamortized excess remaining in the cost of fixed maturity investments approximated $500 million as of June 30, 2002.

Realized investment gain/loss has been a recurring element in Berkshire's net earnings for many years. Such amounts ¾  recorded when investments (1) are sold; (2) other-than-temporarily impaired; and (3) marked-to-market with a corresponding gain or loss included in earnings ¾  may fluctuate significantly from period to period, resulting in a meaningful effect on reported net earnings. The Consolidated Statements of Earnings include after-tax realized investment gains of $13 million and $420 million for the second quarter of 2002 and 2001, respectively. For the first six months, after-tax realized investment gains totaled $111 million in 2002 and $564 million in 2001.

Berkshire's balance sheet continues to reflect significant liquidity and a strong capital base. Consolidated shareholders' equity at June 30, 2002 totaled $62.4 billion. Consolidated cash and invested assets, excluding assets of finance and financial products businesses, totaled approximately $79.4 billion at June 30, 2002 and $72.5 billion at December 31, 2001. During the first half of 2002, Berkshire deployed about $1.8 billion in internally generated cash for business acquisitions, including $725 million of additional investments in MidAmerican Energy. Subsequent to June 30, 2002, Berkshire committed to invest an additional $950 million in MidAmerican, subject to the closing of MidAmerican’s acquisition of a natural gas pipeline system.

Berkshire’s consolidated borrowings under investment agreements and other debt, excluding borrowings of finance businesses, totaled $4,091 million at June 30, 2002 and $3,485 million at December 31, 2001. The increase in borrowings during the first half of 2002 relates to pre-acquisition debt of Albecca Inc., which was acquired in February 2002, and Berkshire’s issuance of the SQUARZ securities in May 2002. Albecca’s outstanding borrowings at June 30, 2002 primarily consist of $135 million 10.75% senior subordinated notes, due August 2008. The notes are redeemable beginning in August 2003 and it is Berkshire’s intention to redeem the notes at that time. The SQUARZ securities consist of $400 million par amount of senior notes due in November 2007 together with warrants to purchase Berkshire Class A or Class B Common Stock, which expire in May 2007. Warrant premium is payable to Berkshire at an annual rate of 3.75% and interest is payable to note holders at a rate of 3.00%, producing a net negative spread to Berkshire of 0.75%.

During the second quarter of 2001, Berkshire filed a shelf registration to issue up to $700 million in new debt securities at a future date. The intended purpose of the future issuance of debt is to fund the repayment of currently outstanding borrowings of certain Berkshire subsidiaries. The timing and amount of the debt to be issued under the shelf registration has not yet been determined.

Berkshire is contingently liable for the borrowings of Berkadia LLC through a primary guaranty of 90% of its debt and a secondary guaranty of the remaining 10% of Berkadia’s borrowings through Fleet Bank. At June 30, 2002, Berkadia’s unpaid loan balance was $2.85 billion.

Assets of the finance and financial products businesses totaled $35.9 billion at June 30, 2002 and $41.6 billion at December 31, 2001. The overall decline reflects a decline in assets of GRS, which commenced running-off its operations earlier in 2002, lower investments at BH Finance LLC and $2.05 billion in repayments of Berkadia’s loan receivable from FINOVA.

Notes payable and other borrowings of Berkshire’s finance and financial products businesses totaled $5.2 billion at June 30, 2002 and $9.0 billion at December 31, 2001. These balances include Berkadia’s outstanding term loan of $2.85 billion at June 30, 2002 and $4.9 billion at December 31, 2001. The remaining decrease in finance business borrowings relates to decreases in notes payable and commercial paper borrowings by GRS.

Berkshire believes that it currently maintains sufficient liquidity to cover its existing liquidity requirements and provide for contingent liquidity needs.

In applying certain accounting policies, Berkshire’s management is required to make estimates and judgments regarding transactions that have occurred and ultimately will be settled several years in the future. Amounts recognized in the financial statements from such estimates are necessarily based on assumptions about numerous factors involving varying, and possibly significant, degrees of judgment and uncertainty. Accordingly, the amounts currently recorded in the financial statements may prove, with the benefit of hindsight, to be inaccurate. The balance sheet items most significantly affected by these estimates are property and casualty insurance and reinsurance related liabilities, valuation of invested assets where no market quotations are available and reviewing for goodwill impairments.

Berkshire accrues liabilities for unpaid losses under property and casualty insurance and reinsurance contracts based upon estimates of the ultimate amounts payable under the contracts related to losses occurring on or before the balance sheet date. As of any balance sheet date, all claims have not yet been reported and some claims may not be reported for many years. As a result, the liability for unpaid losses includes significant estimates for incurred-but-not-reported claims. Additionally, reported claims are in various stages of the settlement process. Each claim is settled individually based upon its merits and certain liability or workers’ compensation claims may take years to settle, especially if legal action is involved.