Bravera Bank
General Liability Insurance
After an extended period of hardening conditions in the general liability insurance segment due to rising claim frequency and severity, the last few years have produced improved underwriting results and, in turn, a more stable pricing environment. According to industry data, most policyholders have encountered modest, single-digit rate increases and healthy capacity since the beginning of 2023. Average premium increases in the final quarter of 2024 reached 5.3%, up slightly from 4.8% in the previous quarter. The first half of 2025 has shown a similar trend, with average rate hikes hovering just above 4%.
While policyholders with fewer exposures and strong risk management programs are experiencing ongoing rate stabilization, those operating in higher-risk industries (e.g., construction, hospitality, retail and real estate) or with poor loss history still face larger premium hikes and coverage restrictions.
Current Market Trends and Cost Drivers
Although the general liability insurance market is displaying signs of stability, some troubling developments and cost drivers persist. In particular, the United States continues to be a highly litigious environment, prompting a growing number of lawsuits following liability incidents—actual or alleged—and, consequently, heightened legal defense expenses and associated insurance claims. This trend is primarily driven by social inflation, which refers to increasing claims costs due to changing societal attitudes toward litigation. Altogether, this phenomenon has fueled aggressive advertising efforts from plaintiffs’ attorneys, a rise in third-party litigation funding (TPLF), and more frequent nuclear verdicts and settlements (i.e., awards exceeding $10 million). This litigation can often leave impacted policyholders with complex general liability losses and substantial out-of-pocket costs.
While some states have introduced laws aimed at reining in TPLF and related lawsuits, social inflation will likely keep affecting claims costs and posing underinsurance concerns in the segment for the foreseeable future.
In addition to the challenges posed by social inflation, insureds are increasingly encountering exclusions for general liability losses caused by emerging risks. For example, polyfluoroalkyl substances (PFAS)—a group of chemicals widely utilized in different products and packaging across the United States—have been the subject of increased regulatory scrutiny and legal action following new developments regarding their health and safety. This means that policyholders using PFAS in their operations are more vulnerable to liability claims, namely those in which customers allege exposure to such substances made them ill. As administrative pressures and litigation concerns related to these chemicals press on, many insurers are excluding coverage for PFAS-related losses.
Similarly, the regulatory landscape surrounding biometric data collection is evolving, presenting elevated liability risks for policyholders using it to enhance workplace processes (e.g., access controls and employee monitoring). No federal law addresses biometric data privacy, but several states have enacted legislation of their own, making it challenging for insureds to keep up with compliance requirements and exposing them to costly lawsuits. Complicating matters, many general liability policies lack clear language regarding coverage for biometric data claims. Some policyholders have attempted to leverage personal and advertising injury provisions for protection, but this is often contested by insurers. Going forward, insurers will likely revise their policy wording to specifically exclude biometric data losses.
Lastly, active shooter incidents have skyrocketed in recent years, presenting considerable liability exposures. These incidents, which entail an individual or multiple people entering a populated area to kill (or attempt to kill) their victims using firearms, frequently result in serious consequences, including property damage, business interruptions, debilitating injuries, devastating loss of life, and prolonged emotional trauma among those affected or involved. When such incidents occur on their premises, policyholders could face various lawsuits for allegedly failing to protect employees, customers and other parties from harm. What’s worse, most general liability policies exclude coverage for intentional violent acts and claims stemming from mental anguish or emotional trauma, making protection limited for active shooter incidents. As such, some insureds have sought additional coverage through specific endorsements or standalone offerings.
Key Cost Drivers
- Social inflation
- Active shooter incidents
- Evolving legislation on PFAS and biometric data usage
What to Expect for the Remainder of 2025
- Continued rate stabilization
- Healthy capacity
- Coverage exclusions for emerging risks
Looking Ahead
Policyholders can generally expect to see continued rate moderation and ample capacity in the general liability insurance segment for the remainder of 2025; yet, premium pricing and coverage terms may vary based on industry, risk quality and jurisdiction. Specifically, those operating in sectors and locations with more prevalent liability exposures, litigation, and nuclear verdicts and settlements may face particularly stringent underwriting standards and other coverage difficulties. Regardless of their risk profiles, all insureds should carefully review their general liability policies for any changes to coverage exclusions, especially regarding protection for PFAS, biometric data and active shooter incidents. Depending on these changes, policyholders should explore specialized solutions to minimize possible coverage gaps.
Questions about insurance?
Contact one of our insurance advisors by calling 877-483-6811 or by contacting us online. You can also request a review online.